Accounting Information Systems - Systems Documentation Techniques

Chapter 3: Systems Documentation Techniques

Learning Objectives

  • Prepare and use data flow diagrams (DFDs) to understand, evaluate, and document information systems.
  • Prepare and use flowcharts to understand, evaluate, and document information systems.
  • Prepare and use business process diagrams (BPDs) to understand, evaluate, and document information systems.

Diagram Type Usage

  • Data Flow Diagrams: Best for visualizing how data moves through a system.
  • Flowcharts: Ideal for illustrating sequential steps in a process.
  • Business Process Diagrams: Suitable for mapping complex business processes.

Systems Documentation Techniques

  • Differentiate the Systems Documentation Techniques

Data Flow Diagram (DFD) - Customer Payment Process

  • External Entities:
    • Customer (A)
    • Bank (J)
    • Credit Manager (K)
  • Processes:
    • Process Payment (1.0) (C)
    • Update Receivables (2.0) (F)
  • Data Flows:
    • Customer Payment (B)
    • Payment Data (D)
    • Deposit (E)
    • Receivables Information (I)
    • Customer Remittance (G)
    • Accounts Receivable (H)
    • Customer Inquiries (L)
  • Data Store:
    • Accounts Receivable (H)

System Flowchart - Sales Processing at S&S

  • Input:
    • Sales Terminal (Enter and Edit Input Data)
  • Process:
    • Display Sales Data
    • Edit Sales Data & Print Customer Receipt
    • Perform Calculation and Update Record (if a condition is met)
    • Update Databases
  • Storage:
    • Accounts Receivable Database
    • Inventory Database
    • Sales/Marketing Database
    • General Ledger
  • Output:
    • Customer Receipt
    • Customer Account Status
    • Inventory Status
    • Sales Analysis

Business Process Diagram - Payroll Processing at S&S

  • Participants:
    • Employee (New Employee, Susan Ashton)
    • Human Resources
    • Payroll
    • Departments
    • Accounts Payable
  • Activities:
    • Complete new employee form
    • Complete employee change form
    • Receive employee timecards
    • Prepare employee paychecks, payroll summary
    • Prepare payroll register, tax report
    • Prepare tax check, total payroll check, & disbursement voucher
    • Approve & sign paychecks, tax check, and payroll check
    • Disburse checks & reports to employees, bank, and government
    • Update employee/payroll files
    • Forward cash disbursement vouchers
    • Update general ledger, cancel journal vouchers

Why Document Systems?

  • Accountants must be able to read documentation and understand how a system works (e.g., auditors need to assess risk).
  • Sarbanes-Oxley Act (SOX) requires management to assess internal controls and auditors to evaluate the assessment.
  • Used for systems development and changes.

Data Flow Diagrams (DFD)

  • Focuses on the data flows for:
    • Processes
    • Sources and destinations of the data
    • Data stores
  • DFDs are visually simple and can be used to represent the same process at a high abstract (summary) or detailed level.

Basic Data Flow Diagram Elements

Basic Guidelines for Creating a DFD

  • Understand the system that you are trying to represent.
  • A DFD is a simple representation, meaning that you need to consider what is relevant and what needs to be included.
  • Start with a high level (context diagram) to show how data flows between outside entities and inside the system. Use additional DFDs at the detailed level to show how data flows within the system.
  • Identify and group all the basic elements of the DFD.
  • Name data elements with descriptive names, use action verbs for processes (e.g., update, edit, prepare, validate, etc.).
  • Give each process a sequential number to help the reader navigate from the abstract to the detailed levels.
  • Edit/Review/Refine your DFD to make it easy to read and understand.

Flowcharts

  • Describe an information system showing:
    • Inputs and Outputs
    • Information activities (processing data)
    • Data storage
    • Data flows
    • Decision steps
  • Key strengths of flowcharts are that they can easily capture control via decision points and show manual vs. automated processes.

Flowchart Symbols

  • Input/Output Symbols
    • Document: An electronic or paper document or report
    • Multiple copies of one paper document: Illustrated by overlapping the document symbol and printing the document number on the face of the document in the upper right corner
    • Electronic Output: Information displayed by an electronic output device such as a terminal, monitor, or screen
    • Electronic Data Entry: Electronic data entry device such as a computer, terminal, tablet, or phone
    • Electronic input and output device: The electronic data entry and output symbols are used together to show a device used for both
  • Storage Symbol
    • Database: Data stored electronically in a database
    • Magnetic tape: Data stored on a magnetic tape; tapes are popular back-up storage mediums
    • Paper document file: File of paper documents; letters indicate file-ordering sequence: N = numerically, A = alphabetically, D = by date
    • Journal/ledger: Paper-based accounting journals and ledgers
  • Processing Symbols
    • Computer processing: A computer-performed processing function; usually results in a change in data or information
    • Decision: A decision-making step
    • Manual operation: A processing operation performed manually
    • Annotation: Addition of descriptive comments or explanatory notes as clarification
  • Flow and Miscellaneous Symbols
    • Document or Processing flow: Direction of processing or document flow; normal flow is down and to the right
    • Communication link: Transmission of data from one geographic location to another via communication lines
    • On-page connector: Connects the processing flow on the same page; its usage avoids lines crisscrossing a page
    • Off-page connector: An entry from, or an exit to, another page
    • Terminal: A beginning, end, or point of interruption in a process; also used to indicate an external party

Types of Flowcharts

  • Document: Shows the flow of documents and data for a process, useful in evaluating internal controls.
  • System: Depicts the data processing cycle for a process.
  • Program: Illustrates the sequence of logic in the system process.

Guidelines for Drawing Flowcharts

  • Understand the system you are trying to represent.
  • Identify business processes, documents, data flows, and data processing procedures.
  • Organize the flowchart so as it reads from top to bottom and left to right.
  • Clearly label all symbols.
  • Use page connectors (if it cannot fit on a single page).
  • Edit/Review/Refine to make it easy to read and understand.

Business Process Diagrams

  • A visual way to represent the activities in a business process.
  • Intent is that all business users can easily understand the process from a standard notation (BPMN: Business Process Modeling Notation).
  • Can show the organizational unit performing the activity.

Business Process Diagram Basic Symbols

Payroll Business Process Diagram Example

Guidelines for Drawing Data Flow Diagrams

  • Identify and understand the business process.
  • Decide the level of detail (summary or detailed DFD).
  • Organize diagram using as many rows needed to explain the process.
  • Enter each business process on the diagram showing where it begins and ends.
  • Draw a rough sketch, refine, and finalize.

Key Terms

  • Documentation
  • Narrative description
  • Data flow diagram (DFD)
  • Data source
  • Data destination
  • Data flow
  • Process
  • Data store
  • Context diagram
  • Flowchart
  • Document flowchart
  • Internal control flowchart
  • System flowchart
  • Program flowchart
  • Business process diagram (BPD)