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The IS auditor should FIRST determine:

A project manager of a project that is scheduled to take 18 months to complete announces that the
project is in a healthy financial position because, after 6 months, only one-sixth of the budget has
been spent. The IS auditor should FIRST determine:

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A.
what amount of progress against schedule has been achieved.

B.
if the project budget can be reduced.

C.
if the project could be brought in ahead of schedule.

D.
if the budget savings can be applied to increase the project scope.

Explanation:
Cost performance of a project cannot be properly assessed in isolation of schedule performance.
Cost cannot be assessed simply in terms of elapsed time on a project. To properly assess the
project budget position it is necessary to know how much progress has actually been made and,
given this, what level of expenditure would be expected. It is possible that project expenditure
appears to be low because actual progress has been slow. Until the analysis of project against
schedule has been completed, it is impossible to know whether there is any reason to reduce
budget, if the project has slipped behind schedule, then not only may there be no spare budget but
it is possible that extra expenditure may be needed to retrieve the slippage. The low expenditure
could actually be representative of a situation where the project is likely to miss deadlines rather
than potentially come in ahead of time. If the project is found to be ahead of budget after adjusting

for actual progress, this is notnecessarily a good outcome because it points to flaws in the original
budgeting process; and, as said above, until further analysis is undertaken, it cannot be determined
whether any spare funds actually exist. Further, if the project is behind schedule, then adding scope
may be the wrong thing to do.


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