1. SRT510 Business Case Studies Auditing IT Investment Performance

2. NPV Analysis Estimates Provide the following for a project:  Costs (cash outflows)  Benefits (cash inflows)  Timing of outflows and inflows

3. Example Intermec Inc (note—some numbers are fictitious) Project P  Ultra secure wireless network  NPV $14.02M after 5 years at 15%; IRR 22%

4. How do you measure accuracy of estimates? Outflows (costs)  Balance sheet; cash flow statement  Typically quarterly Inflows (benefits)  Balance sheet; income statement  Typically quarterly

5. Example Intermec Inc. (note—some numbers are fictitious)  Financial statement  Large differences in actual:expected!

6. Audit Plan Take yearly projections and divide into quarters ($ are not necessarily equal— think of differences between businesses; think seasonality) Add expected values As real numbers come in, calculate difference

7. Adjustments Part of your audit:  How do you respond to differences between expected and actual?  What if expected targets are not being met?

8. When do you plan for audit? Part of Project Management  Plan your audit (closing phase?) Who? How? – what fields? What variance?...