AIS flowcharts & DFDs

documentation

Narratives, flowcharts, diagrams, and other written materials that explain how a system works.

narrative description

Written, step-by-step explanation of system components and how they interact.

Documentation tools are important on the following levels:

1. At a minimum, you must be able to read documentation to determine how a system works.

2. You may need to evaluate documentation to identify internal control strengths and weaknesses and recommend improvements as well as to determine if a proposed system meets the company's needs.

3. More skill is needed to prepare documentation that shows how an existing or proposed system operates

Data flow diagram (DFD)

a graphical description of data sources, data flows, transformation processes, data storage, and data destinations

Flowchart, which is a graphical description of a system. There are several types of flow charts, including:

a. Document flowchart, which shows the flow of documents and information between departments or areas of responsibility

b. System flowchart, which shows the relationship among the input, processing, and ouput in an information system

c. Program flowchart, which shows the sequence of logical operations a computer performs as it executes a program.

Business Process diagrams

which is a graphical description of the business processes used by a company

documentation tools

Data flow diagram (DFD),

Flowchart,

Business Process diagrams

The Sarbanes-Oxley Act (SOX) of 2002 requires

an internal control report in public company annual reports that (1) states that management is responsible for establishing and maintaining an adequate internal control structure and (2) assesses the effectiveness of the company's internal controls. SOX also specifies that a company's auditor must evaluate management's assessment of the company's internal control structures and attest to its accuracy. The auditor's attestation should include a specific notation about significant defects or material noncompliance found during internal control tests. This means that both the company and its auditors have to document and test the company's internal controls. To do so, they must be able to prepare, evaluate, and read different types of documentation, such as business process models and flowcharts.

A data flow diagram (DFD) graphically describes

the flow of data within an organization. It uses the first four symbols to represent four basic elements: data sources and destinations, data flows, transformation processes, and data stores

data source

The entity that produces or sends the data that is entered into a system.

data destination

The entity that receives data produced by a system.

data flow

The movement of data among processes, stores, sources, and destinations.

A data flow

is the movement of data among processes, stores, sources, and destinations. Data that pass between data stores and a source or destination must go through a data transformation process. Data flows are labeled to show what data is flowing. The only exception is data flow between a process and a data store

process

The action that transforms data into other data or information.

data store

The place or medium where system data is stored.

The highest-level DFD is referred to as a

context diagram because it provides the reader with a summary-level view of a system. It depicts a data processing system and the entities that are the sources and destinations of system inputs and outputs

five data processing activities:

1. Updating the employee/payroll master file.

2. Handling employee compensation

3. Generating management reports

4. Paying taxes

5. Posting entries to the general ledger

Flowchart

is a pictorial, analytical technique used to describe some aspect of an information system in a clear, concise, and logical manner. Flowcharts record how business processes are performed and how documents flow through the organization. They are also used to analyze how to improve business processes and document flows. Most flowcharts are drawn using a software program such as Visio, Word, Excel, or PowerPoint. Flowcharts use a standard set of symbols to describe pictorially the transaction processing procedures a company uses and the flow of data through a system.

Input/output symbols show

input to or output from a system.

Processing symbols show data processing,

either electronically or by hand.

3. Storage symbols show

where data is stored.

Flow and miscellaneous symbols indicate

the flow of data, where flowcharts begin or end, where decisions are made, and how to add explanatory notes to flowcharts.

Document flowcharts

were developed to illustrate the flow of documents and data among areas of responsibility within an organization. They trace a document from its cradle to its grave, showing where each document originates, its distribution, its purpose, its disposition, and everything that happens as it flows through the system.

A special type of flowchart, called an internal control flowchart is used to

describe, analyze, and evaluate internal controls. They are used to identify system weaknesses or inefficiencies, such as inadequate communication flows, insufficient segregation of duties, unnecessary complexity in document flows, or procedures responsible for causing wasteful delays

A system flowchart depicts

the relationships among system input, processing, storage, and outpu

A program flowchart illustrates

the sequence of logical operations performed by a computer in executing a program

A Business Process Diagram (BPDs)

is a visual way to describe the different steps or activities in a business process. For example, there are many activities in the revenue cycle. Among them are receiving an order, checking customer credit, verifying inventory availability, and confirming customer order acceptance. Likewise, there are multiple activities involved in the expenditure cycle. Among them are shipping the goods ordered, billing the customer, and collecting customer payments. All of these activities can be shown on a BPD to give the reader an easily understood pictorial view of what takes place in a business process.

A DFD is a representation of which of the following?

a.the logical operations performed by a computer program [Incorrect. This is a description of a program flowchart.

flow of data in an organization

Documentation methods such as DFDs, BPDs, and flowcharts save both time and money, adding value to an organization.

True

A DFD consists of the following four basic elements:

data sources and destinations, data flows, transformation processes, and data stores. Each is represented on a DFD by a different symbol.

All of the following are guidelines that should be followed in naming DFD data elements

a.Process names should include action verbs such as update, edit, prepare, and record. [Incorrect. Action verbs should be used to name process data elements.

b.Make sure the names describe all the data or the entire process. [Incorrect. Data element names should reflect what is known about the element.

d.Choose active and descriptive names. [Incorrect. Active and descriptive names should be used in naming data elements.

The documentation skills that accountants require vary with their job function. However, all accountants should at least be able to do which of the following?

Read documentation to determine how the system works. All accountants should at least be able to read and understand system documentation.

All Are True

a.A flowchart is an analytical technique used to describe some aspect of an information system in a clear, concise, and logical manner.

b.Flowcharts use a standard set of symbols to describe pictorially the flow of documents and data through a system.

c.Flowcharts are easy to prepare and revise when the designer utilizes a flowcharting software package.

Which of the following flowcharts illustrates the flow of data among areas of responsibility in an organization?

document flowchart [Correct. A document flowchart traces the life of a document from its cradle to its grave as it works its way through the areas of responsibility within an organization.]

All of the following are recommended guidelines for making flowcharts more readable, clear, concise, consistent, and understandable

a.Divide a document flowchart into columns with labels. [ Dividing the flowchart into columns helps make it more readable, clear, concise, consistent, and understandable.]

c.Design the flowchart so that flow proceeds from top to bottom and from left to right. Flowcharts should be prepared so that they are read like a book.]

d.Show the final disposition of all documents to prevent loose ends that leave the reader dangling. [All documents should be placed either in a file or sent to another entity.]

How are data sources and destinations represented in a data flow diagram?

As an square