Clare Barber is an internal auditor with IQC, a large, London based, consulting company. For the last financial year, IQC generated income of £200m from its consulting activities. In February 2007 the management committee of IQC decided to restructure the company’s accounting and finance information systems. The management committee have decided to migrate all accounting and finance related applications currently run on the company’s centralised mainframe to eight local area networks with the migration to be complete by March 2008. Clare is the audit department’s representative on the company’s systems committee responsible for designing and implementing the new system.
Required
§ Explain what the term local area network (LAN) means and describe its major components and configurations.
§ What are the main advantages and disadvantages of using a LAN.
§ Explain why a company such as IQC consulting would choose a distributed LAN system over the centralised mainframe system, and describe the possible internal control problems that could arise from adopting the new LAN.