You have been assigned to the annual audit of Explosives, Inc. You contact the senior, Bob Good, as instructed and arrange a date to discuss the client and the current year's audit.

At your meeting with Good, the company and the current year's audit were discussed. During the discussion, Good emphasized that he wanted to take a good look at the data processing (DP) department. He had attended the firm's one-week course on computer auditing and felt strongly about the need for such review.

On the eighth day of the job, Bob received word that his immediate attention was needed on another job. He had performed most of the review in the DP department and wanted you to complete it. You had completed most of the study and evaluation of the manual systems and had established the tests to be performed. To assist you, Good arranged to have a new hire test the manual systems. Good left the following workpapers to help you complete the review of the DP department.

General Background The DP department has evolved from a tab operation and currently uses IBM 360 equipment. The department is under the supervision of Charlie Snyder who has worked in it since its inception. He reports to the controller.

The department is located on the third floor of the east office wing. It shares office space with the research department and the general accounting department. The machines, however, are physically separated from the other departments by glass doors. The chemical mixing department is located just below on the second floor. The first floor houses the plant personnel department, various conference rooms, and other administrative offices.

The DP department services corporate accounting, the local plant and three other plant locations elsewhere in the country. The department has an IBM \(360 / 30\) computer. Card input is used on most applications. There are two IBM card sorters which are used extensively to sort the card input. Cards are retained for at least one year.

Within the DP department, there are three groups, each with specific duties:

1. Keypunch.

2. Systems analysis.

3. Programming and operations.

Each group has its own supervisor who reports to the DP manager.