Connie McKenzie is perplexed. Her employment agency, founded more than 15 years ago, is losing clients to its competitors. The McKenzie team, which was once known for the high quality and diversity of its pool of applicants and employers, is finding it increasingly difficult to make good placements. In the past 5 years, its placement rate has gone from 97% to less than 60%. Ms. McKenzie is aware of the negative impact that her low placement rate is having on her ability to attract good applicants, and she has hired you to investigate the factors that might have caused this large decline in the effectiveness of the services offered by her business.

From the first day, you make some significant observations. The computer system, which you are told was once highly efficient, is operating slowly and no longer makes the optimal match between applicants and employers. No one can pinpoint the causes of this slowdown but everyone agrees that the poor performance of the computer system is partly responsible for the declining placement rate. I was able to able to gain access to the network and matching application software without entering a password. I was also able to enter fictitious data, including a telephone number in the alphanumeric address field and aaaaaaaa into the telephone field. Finally, I was also able to print out the fictitious information without any problems.

You have also noticed that many programs installed at work stations are unrelated to the tasks that employees perform. As well, you have learned that employees can individually purchase the computer hardware and software that they feel they need and can then submit the invoices to be reimbursed. There is no control over the use of hardware and software, which are sometimes used for personal purposes.

Lastly, some financial data are centralized but they are easily accessible, and recently an employee was able to obtain a detailed list of the salaries of the entire staff. This incident created a commotion and caused contention among some employees.

You are convinced that the businesss problems are largely due to the fact that Ms. McKenzie has not managed the risks associated with her end-user computing environment. When you share your findings with her, she admits that she does not clearly understand those risks.

Required:

Explain the following points:

1. Describe three general risks associated with end-user computing.
2. Identify two application level control problems that may have led to the poor performance of the computer system.

1. State your answer using the following format: weakness (1/2 mark each), impact (1/2 marks each) and recommendation (1 mark) (WIR)
2. For each problem identified, state one audit procedure that should be performed during the audit and the related audit assertion.