Page 51 - Accounting Information Systems

22 PART I Overview of Accounting Information Systems

Stakeholders are individuals inside or outside the firm who have an interest in the system but are not
end users. They include management, internal auditors, and consultants who oversee systems
development.

Once a new system has been designed and implemented, the systems maintenance group assumes
responsibility for keeping it current with user needs. Over the course of the system’s life (often several
years), between 80 and 90 percent of its total cost will be attributable to maintenance activities.

Distributed Data Processing
An alternative to the centralized model is the concept of distributed data processing (DDP). The topic of
DDP is quite broad, touching on such related topics as end-user computing, commercial software, net-
working, and office automation. Simply stated, DDP involves reorganizing the IT function into small in-
formation processing units (IPUs) that are distributed to end users and placed under their control. IPUs
may be distributed according to business function, geographic location, or both. Any or all of the IT activ-
ities represented in Figure 1-10 may be distributed. Figure 1-11 shows a possible new organizational
structure following the distribution of all data processing tasks to the end-user areas.
Notice that the central IT function has been eliminated from the organization structure. Individual
operational areas now perform this role. In recent years, DDP has become an economic and operational
feasibility that has revolutionized business operations. However, DDP is a mixed bag of advantages and
disadvantages.

DISADVANTAGES OF DDP. We should bear in mind that the disadvantages of DDP might also be
described as the advantages of a centralized approach. The discussion focuses on important issues that
carry control implications that accountants should recognize. The loss of control is one of the most seri-
ous disadvantages of DDP. Other potential problems include the inefficient use of resources, the destruc-
tion of audit trails, inadequate segregation of duties, an increased potential for programming errors and
systems failures, and the lack of standards. Specific problems are examined in the following section.

FI GU RE
1-11 ORGANIZATIONAL STRUCTURE FOR A DISTRIBUTED PROCESSING SYSTEM

Business
Organization

Marketing Finance Administration Production

Manager Manager
Treasurer Controller
Plant X Plant Y

Information Information Information Information Information Information
Processing Processing Processing Processing Processing Processing
Unit (IPU) Unit (IPU) Unit (IPU) Unit (IPU) Unit (IPU) Unit (IPU)