Reorganisation - EDP Department

At the monthly management meeting of Book Worm, the Managing Director has outlined a new organisation structure. The changes are due to the planned introduction of global responsibilities for the EDP function. The major changes include:

1. The elevation of the EDP Manager to equal status with the other function heads to be able to more effectively apply computer processing into the reporting and management activities. The Board of Directors has established the objective to increase the use of computers in providing improved and more timely internal and external reports and more effective management control over inventories and sales.

The elevation and establishment of the Internal Auditor to be completely independent of the accounting function. This is to allow the objective assessment of accounting as well as providing increased opportunities to be involved in reviewing other functional

1. operations.
2. A reorganisation of store and sales management responsibilities.

The Internal Auditor decides to review the complete EDP function to assist in establishing the new efficiencies. The internal audit report for the review of the EDP operations is to reflect the new organisation structure and the amended corporate objectives.

After an extensive review of the EDP management procedures, the auditor discovers the following:

1. The organisation of the EDP function is as follows:
2. The staff of the EDP department have the following duties:
   1. Systems Analysts:
      • Supervise programming staff.
      • Design client applications or select third party software.
      • Check operation of applications while running.
      • Determine any necessary maintenance or efficiency adjustments and corrections to program applications and make such program changes as necessary.
      • Train Computer Operators in program applications they have designed.
      • Prepare User Operations Manual for applications they have designed.
   2. Programmers
      • Code program applications to specifications designed by system analysts.
      • Assist System Analysts in documenting application procedures.
      • Prepare test data for testing program.
      • Operate computer when testing programs or when computer operators are absent due to illness or annual leave or during end of month second shifts.

2. 3. Librarian
      • Ensure computer operating system is maintained to latest version from software supplier.
      • Maintain register of all client application programs.
      • Maintain register of all utility programs.
      • Secure all programs not in use in a cupboard in the computer room.
      • Create backup copies of all data and programs once a month and store in the "Library" cupboard in the computer room.
3. General security was carried out as follows:

1. Each member of the staff signed a daily log book when they arrived and left for the day. Many staff members signed for both arrival and departure on arrival or during the day when their workload allowed them.
2. Visitors were issued with a visitor's badge at the entrance to the EDP area and allowed to then enter to see the relevant member of staff.
3. Security doors to the EDP department and the computer room were usually left open.
4. Fire alarms were _functioning but fire extinguishers were not carrying valid test tags.
5. The company had regular tours of their computer room by schools in the vicinity.
6. (I) The computer hardware supplier had recently moved their head- office operations to another state. Their new head office had the only other mainframe of their brand that was large enough to be used as an emergency backup.

Required:

1. Write a report setting out the weaknesses found in your operational audit of the EDP function and your recommendations for improvement. Explain in detail, the consequences of the weaknesses you find and why your recommendation will prevent them occurring.
2. In your report comment on the proposed changes to the organisation structure. Also, provide a complete list with your reasons, as to who should be given copies of the report when you compile the distribution list.