Notre Dame of Tacurong College
City of Tacurong

A
Case Study in ITE 205

(Box Corporation)

Submitted by:

Philip Nixon E. Fegarido
BSA-4

Submitted to:

Mr. Jeomar G. Fajartin, CPA
Instructor

I. Background of the Study
Technology may have been the greatest breakthrough that came in to our lives. It provided relief, convenience and progress to our day – to – day lives but also with our careers and so much more. Technological advancements had been the reason for most of the business success stories prevailing in the market today. From the introduction of cellular phones to the most recent innovations in industrial technologies, vast improvements were visibly seen and countries like Japan, China, South Korea, United States and many more proved what power technology can provide.
With technology’s great influence to the industries’ progress, the trend was tailored to incorporating technology in the operations of the businesses. From automated productions with the aid of machines in the work force, to innovative marketing strategies through the use of online platforms such that of Social Networking Sites come another major breakthrough in the form of accounting softwares that automates the business system making it more convenient and less time consuming for the users. Among the examples of these softwares is the Commercial Off–the–shelf Softwares (COTS) which are ready-made and available for sale to the general public. They are designed to be implemented easily into existing systems without the need for customization.
In the precepts that amidst the popularity of these systems, Accounting softwares which can be readily bought in the market is not free from being vulnerable to threats such that of data loss, theft and break downs. These imposes a potential impediment that needs to be discussed and debated as it can cause paralysis in the operations if the business relies greatly on it.
Box Corporation is a new client of a firm, during the start of the audit, the auditor found out that prior to the engagement the entity acquired a microcomputer-based accounting software and installed an off-the-shelf software for their payables, receivables, payroll and general ledger. It was also noticed that the computer sits on top of the bookkeeper’s table free from the reach of others. Although the computer is encrypt with password, it is not strong enough to restrict others from trying to access it. II. Statement of the Problem With the above information, the reliability and vulnerability of the software is at stake and a problem with the efficiency and effectivity of the software was not addressed as there was no test were conducted prior to the implementation of the system’s usage.

III. Viewpoint I stand in the Auditor’s Viewpoint. IV. Alternative Courses of Actions

ACA #1 - Recommend to proceed with the use of the system
Advantages
* No additional cost incurred * Client will not anymore undergo another set of training for the use of the system
Disadvantages
* The system may not be helpful for their kind of business * If fraud were committed prior to the engagement, employees may have concealed the evidences
ACA #2 - Recommend the use of a new customized software for the client.
Advantages
* System is tailored to the type that fits their operations’ complexities. * Security is ensured since the system will be solely be tailored to their operations.
Disadvantages
* Additional cost to be incurred in the acquisition of new software * Need for an expert for trainings in the use of the system * Another set of trainings for the employees implies additional costs and delay to operations * Inefficiency of the new system can paralyze operations
ACA #3 - Withdraw with the engagement. Advantages * No more problems about the client * No need to exert effort to solve the problem
Disadvantages
* No income * Loss of client means loss of added network * May cause bad feedback like incompetency * Loss of credibility

V. Conclusions
The best solution is to choose ACA # 1 as it would be ideal to improve the existing system rather than acquiring a new one. Aside from additional cost that can be incurred, it is practical to use a system which everyone is well versed, in that way, it will ensure the usefulness of the system to the users. Instead of acquiring a new one, the budget can be allocated to the betterment of the existing system through conducting test and improving its’ security features such as those that address access to the system information and protection of the data it provides the entity. In that way, theft can be prevented and reliability of information can be increased. VI. Recommendations

1. An organization-wide survey should be conducted to address the concerns of the other users to the system and to measure its’ efficiency in total. 2. Improvements in the security features of the system should be enforced such as unique passwords for each users to ensure restrictive access to the informations 3. System should be designed to a set-up that only information pertaining to each departments’ transactions can be accessed by at their end such as payables for disbursing department, receivables for the collections department and so on. 4. The improvements made by the systems analyst should be tested if everything in the abovementioned was followed. 5. Back up disks should be kept in a safe place and should be accessible only by persons with authority.