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:

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.