CHAPTER 5: SYSTEM DEVELOPMENT PROCESSES
CHAPTER 5:
SYSTEM DEVELOPMENT
PROCESSES
J.L. Boockholdt, Ph.D., C.P.A.,
C.M.A.
By: Dr. Dyah Nirmala A.J., M.Si.
INTRODUCTION
Accountants commonly apply the systems
approach in the development of new information
systems. Many organization implement the
system approach in a formal process called the
system development life cycle. This chapter
introduces this formal process and variations of it.
Accountants need to know about system
development for two reasons.
1. They participate in project teams that design
accounting systems;
2. Auditors review and make suggestions for
new systems prior to their implementation.
THE OBJECTIVE OF SYSTEM
DEVELOPMENT
The Qualities of a Successful
System
Quality
Achieved by
1. Correct information
Have adequate internal control
2. Timely information
Choose a processing method suited to the
user’s needs
3. Reasonable time for development
a. Properly define the scope of the system
b. User project management techniques.
4. Satisfy the organization’s needs
a. Current
b. Future
5. User satisfaction
a. Get steering committee approval for new
systems projects
b. Have a long range systems master plan
a.
b.
c.
d.
User input in setting policies
User support for projects
Active user participation in projects
User responsibility for the system
Information System Steering
Committee
• A group composed of the chief
information officer and managers
from computer user departments.
Among other duties, this committee
considers and approves new
information system development
projects.
Responsibilities of the Information
Systems Steering Committee
1. Review and approve for further study all
projects requested by operating
departments or the MIS department.
2. Review and approve the MIS department’s
work program and determine priorities for
projects.
3. Review periodic progress reports on active
systems projects.
4. Review and approve proposed plans for
system implementation.
5. Review periodically the MIS department’s
budget.
Project Team
A group of employees with varying
backgrounds who are assigned
responsibility for developing a new
information system.
Relevance for the Accountant:
1. Accountants use more computerized information
systems than any other professional group.
2. Accountants are user representatives on many
project teams when older accounting systems are
replaced.
3. Accountants have a personal concern for its
accuracy and efficiency.
4. Systems directly affect the decision of managers.
Often managers hold accountants responsible for
inaccuracies or inequities designed into these
systems.
5. Accountants are the auditors of accounting
systems.
THE SYSTEM DEVELOPMENT
LIFE CYCLE
The System Development Life Cycle
System Development Life Cycle
The evolutionary pattern followed by
most accounting systems. It consists of
four phases: system analysis, system
design, system implementation, and
system operation.
System Planning
Ideally, system development takes place
within the context of a systems master
plan that coordinates new information
system development projects with the
company’s long range plans.
System Analysis
The first phase of the system
development life cycle. The process of
examining an existing information
system and its environment for the
purpose of identifying potential
improvements.
Reasons for Initiating Systems
Analysis
1. Problem Solving
An existing system does not meet its
objectives. E.g. A small business system has
been outgrown.
2. New Requirement
Information that was not needed before. E.g.
Reporting dividends and interest paid to
comply with tax law.
3. New Technology
Better methods are now available. E.g. Pointof-sale data entry to computer system.
System Design
The second phase of the system
development life cycle. The process of
translating the recommendations made
during systems analysis into a form that
can be implemented.
System Implementation
The third phase of the system
development life cycle, The process of
converting the description created
during system design into a working
information system.
System Operation
The last place of the system
development life cycle. The period of
time during which a working
information system provides
information for decision making and
control.
Formal System Development
Methodologies
1. Structured Systems Analysis and
Design
Focus on Logical System instead of
Physical System
2. Information Engineering
Data driven, not process driven
3. CASE Tools
What CASE Tools Do
RAPID APPLICATION
DEVELOPMENT
Rapid Application
Development
• An approach to developing
information systems that is intended to
decrease the time and cost of
development. It avoids the extensive
decision checkpoints and approval
processes of formal system
development life cycle methods.
RAD Techniques
• User workshops
A meeting of all key people involved in
key project, both users and information
systems professionals.
• Prototyping
An iterative process that avoids the
structure and the periodic formal approval
process of the traditional approaches.
RAD Techniques
• Timeboxes
A fixed time period at the of which the
project team must deliver a working
system.
• Reusable components
Components of a system include computer
programs, forms, display screens,
documentation, and paper reports.
• Developmental Tools
Prototyping
An iterative system development
process in which a small project team
quickly develops a working information
system and allows users to modify it
until they are satisfied with it.
Suggested Steps in Prototyping
1. Analysis. Create an incomplete paper
model of the system based on
preliminary interviews with users.
2. Database development. Create a test
database for use in prototyping.
Using a relational database
management system, the prototype
can be easily changed.
Suggested Steps in Prototyping
3. Menu development. Describe the
menus that will guide the user of the
system. A menu identifies functions
to be performed.
4. Function development. Describe the
functional modules that execute the
processes in the system. These may
include, for example, data entry and
report generation.
Suggested Steps in Prototyping
5. Prototype iteration. Using software
development tools, create each
module. This produces a working
model of the system that a user can
easily modify. Make changes to the
prototype until the user is satisfied.
6. Detailed specifications. Refine the
system as necessary to make it
efficient in creating a production
system. Complete the documentation
for the system.
OBJECT ORIENTED
DEVELOPMENT
An approach to developing information
systems that is intended to decrease
developing time and costs and to make
system maintenance easier. It requires
identifying the basic elements, or
objects, relevant to the system.
AUDITOR INVOLVEMENT IN
SYSTEM DESIGN
Auditor’s Role in the
Development Process
System Analysis Phase
Provide audit reports on systems being examined to the
study team.
System Design Phase
Review the proposed design:
1. Reports. Identify information needed in reports for
control and auditability
2. Processing steps. Suggest control procedures
3. Equipment selection. Ensure that those selected conform
to existing company policies
4. Data files. Determine that data will be accurate and
complete, and will provide the ability to audit the system.
Auditor’s Role in the
Development Process
System Implementation Phase
During system testing, review adequacy of test data and
results of tests.
Review plans for conversion to ensure that accurate data
are maintained during changeover to the new system.
System Operation Phase
During the post-implementation review, assess the
adequacy of internal controls in the operational system.
Audit Trail
Information, including journal entry
numbers, posting references, and
document numbers, that is included on
the outputs of an accounting system.
They allow auditor to identify the
individual transactions that make up an
account balance.
Internal Controls
The features of an accounting system
that prevent and detect errors and fraud.
They help it to produce accurate
information.
Question A
• Explain what is meant by a successful
information system!
• Define the following terms:
1.
2.
3.
4.
System analysis
System design
System implementation
System operation
• What are some reasons for initiating
system analysis within an
organization?
Question B
• In a large organization, who performs
long-range system planning?
Medium-range? Short-range?
• Explain why we say that the life of an
information system follows a cycle?
• In which ways are the preliminary
description and the detailed
specification of a new system similar?
In which ways do they differ?
Question C
• What can happen when employees
refuse to accept a new information
system?
• Why should an accountant be
concerned about the success of an
information system?
• Which activities take place during
system implementation?
Question D
• Identify some reasons why employees
refuse to accept new systems?
• What can be done to gain user
acceptance of a new system?
• Why should auditors participate in the
system development process? On
which features do they concentrate
their effort?
SYSTEM DEVELOPMENT
PROCESSES
J.L. Boockholdt, Ph.D., C.P.A.,
C.M.A.
By: Dr. Dyah Nirmala A.J., M.Si.
INTRODUCTION
Accountants commonly apply the systems
approach in the development of new information
systems. Many organization implement the
system approach in a formal process called the
system development life cycle. This chapter
introduces this formal process and variations of it.
Accountants need to know about system
development for two reasons.
1. They participate in project teams that design
accounting systems;
2. Auditors review and make suggestions for
new systems prior to their implementation.
THE OBJECTIVE OF SYSTEM
DEVELOPMENT
The Qualities of a Successful
System
Quality
Achieved by
1. Correct information
Have adequate internal control
2. Timely information
Choose a processing method suited to the
user’s needs
3. Reasonable time for development
a. Properly define the scope of the system
b. User project management techniques.
4. Satisfy the organization’s needs
a. Current
b. Future
5. User satisfaction
a. Get steering committee approval for new
systems projects
b. Have a long range systems master plan
a.
b.
c.
d.
User input in setting policies
User support for projects
Active user participation in projects
User responsibility for the system
Information System Steering
Committee
• A group composed of the chief
information officer and managers
from computer user departments.
Among other duties, this committee
considers and approves new
information system development
projects.
Responsibilities of the Information
Systems Steering Committee
1. Review and approve for further study all
projects requested by operating
departments or the MIS department.
2. Review and approve the MIS department’s
work program and determine priorities for
projects.
3. Review periodic progress reports on active
systems projects.
4. Review and approve proposed plans for
system implementation.
5. Review periodically the MIS department’s
budget.
Project Team
A group of employees with varying
backgrounds who are assigned
responsibility for developing a new
information system.
Relevance for the Accountant:
1. Accountants use more computerized information
systems than any other professional group.
2. Accountants are user representatives on many
project teams when older accounting systems are
replaced.
3. Accountants have a personal concern for its
accuracy and efficiency.
4. Systems directly affect the decision of managers.
Often managers hold accountants responsible for
inaccuracies or inequities designed into these
systems.
5. Accountants are the auditors of accounting
systems.
THE SYSTEM DEVELOPMENT
LIFE CYCLE
The System Development Life Cycle
System Development Life Cycle
The evolutionary pattern followed by
most accounting systems. It consists of
four phases: system analysis, system
design, system implementation, and
system operation.
System Planning
Ideally, system development takes place
within the context of a systems master
plan that coordinates new information
system development projects with the
company’s long range plans.
System Analysis
The first phase of the system
development life cycle. The process of
examining an existing information
system and its environment for the
purpose of identifying potential
improvements.
Reasons for Initiating Systems
Analysis
1. Problem Solving
An existing system does not meet its
objectives. E.g. A small business system has
been outgrown.
2. New Requirement
Information that was not needed before. E.g.
Reporting dividends and interest paid to
comply with tax law.
3. New Technology
Better methods are now available. E.g. Pointof-sale data entry to computer system.
System Design
The second phase of the system
development life cycle. The process of
translating the recommendations made
during systems analysis into a form that
can be implemented.
System Implementation
The third phase of the system
development life cycle, The process of
converting the description created
during system design into a working
information system.
System Operation
The last place of the system
development life cycle. The period of
time during which a working
information system provides
information for decision making and
control.
Formal System Development
Methodologies
1. Structured Systems Analysis and
Design
Focus on Logical System instead of
Physical System
2. Information Engineering
Data driven, not process driven
3. CASE Tools
What CASE Tools Do
RAPID APPLICATION
DEVELOPMENT
Rapid Application
Development
• An approach to developing
information systems that is intended to
decrease the time and cost of
development. It avoids the extensive
decision checkpoints and approval
processes of formal system
development life cycle methods.
RAD Techniques
• User workshops
A meeting of all key people involved in
key project, both users and information
systems professionals.
• Prototyping
An iterative process that avoids the
structure and the periodic formal approval
process of the traditional approaches.
RAD Techniques
• Timeboxes
A fixed time period at the of which the
project team must deliver a working
system.
• Reusable components
Components of a system include computer
programs, forms, display screens,
documentation, and paper reports.
• Developmental Tools
Prototyping
An iterative system development
process in which a small project team
quickly develops a working information
system and allows users to modify it
until they are satisfied with it.
Suggested Steps in Prototyping
1. Analysis. Create an incomplete paper
model of the system based on
preliminary interviews with users.
2. Database development. Create a test
database for use in prototyping.
Using a relational database
management system, the prototype
can be easily changed.
Suggested Steps in Prototyping
3. Menu development. Describe the
menus that will guide the user of the
system. A menu identifies functions
to be performed.
4. Function development. Describe the
functional modules that execute the
processes in the system. These may
include, for example, data entry and
report generation.
Suggested Steps in Prototyping
5. Prototype iteration. Using software
development tools, create each
module. This produces a working
model of the system that a user can
easily modify. Make changes to the
prototype until the user is satisfied.
6. Detailed specifications. Refine the
system as necessary to make it
efficient in creating a production
system. Complete the documentation
for the system.
OBJECT ORIENTED
DEVELOPMENT
An approach to developing information
systems that is intended to decrease
developing time and costs and to make
system maintenance easier. It requires
identifying the basic elements, or
objects, relevant to the system.
AUDITOR INVOLVEMENT IN
SYSTEM DESIGN
Auditor’s Role in the
Development Process
System Analysis Phase
Provide audit reports on systems being examined to the
study team.
System Design Phase
Review the proposed design:
1. Reports. Identify information needed in reports for
control and auditability
2. Processing steps. Suggest control procedures
3. Equipment selection. Ensure that those selected conform
to existing company policies
4. Data files. Determine that data will be accurate and
complete, and will provide the ability to audit the system.
Auditor’s Role in the
Development Process
System Implementation Phase
During system testing, review adequacy of test data and
results of tests.
Review plans for conversion to ensure that accurate data
are maintained during changeover to the new system.
System Operation Phase
During the post-implementation review, assess the
adequacy of internal controls in the operational system.
Audit Trail
Information, including journal entry
numbers, posting references, and
document numbers, that is included on
the outputs of an accounting system.
They allow auditor to identify the
individual transactions that make up an
account balance.
Internal Controls
The features of an accounting system
that prevent and detect errors and fraud.
They help it to produce accurate
information.
Question A
• Explain what is meant by a successful
information system!
• Define the following terms:
1.
2.
3.
4.
System analysis
System design
System implementation
System operation
• What are some reasons for initiating
system analysis within an
organization?
Question B
• In a large organization, who performs
long-range system planning?
Medium-range? Short-range?
• Explain why we say that the life of an
information system follows a cycle?
• In which ways are the preliminary
description and the detailed
specification of a new system similar?
In which ways do they differ?
Question C
• What can happen when employees
refuse to accept a new information
system?
• Why should an accountant be
concerned about the success of an
information system?
• Which activities take place during
system implementation?
Question D
• Identify some reasons why employees
refuse to accept new systems?
• What can be done to gain user
acceptance of a new system?
• Why should auditors participate in the
system development process? On
which features do they concentrate
their effort?