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The IS auditor should FIRST verify that the:

An IS auditor is reviewing a project to implement a payment system between a parent bank and a
subsidiary. The IS auditor should FIRST verify that the:

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A.
technical platforms between the two companies are interoperable.

B.
parent bank is authorized to serve as a service provider.

C.
security features are in place to segregate subsidiary trades.

D.
subsidiary can join as a co-owner of this payment system.

Explanation:

Even between parent and subsidiary companies, contractual agreement(s) should be in place to
conduct shared services. This is particularly important in highly regulated organizations such as
banking. Unless granted to serve as a service provider, itmay not be legal for the bank to extend

business to the subsidiary companies. Technical aspects should always be considered; however,
this can be initiated after confirming that the parent bank can serve as a service provider. Security
aspects are another important factor; however, this should be considered after confirming that the
parent bank can serve as a service provider. The ownership of the payment system is not as
important as the legal authorization to operate the system.


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