data flow diagram and internal controls and system documentation
Akshansh Mehta
2848000_3_414549-636726223352321404-414549-636722341070795686-topic-4-ais--1-.pptxACC539 – ACCOUNTING INFORMATION SYSTEMS SCHOOL OF ACCOUNTING AND FINANCE 1
Systems Documentation
At the completion of this topic, you should be able to:
understand and explain the importance of systems documentation including the use of diagrams;
describe, prepare and analyse data flow diagrams; and
describe, prepare and analyse the differing types of flowcharts.
Topics Goals
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Systems Documentation
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Set of documents and models
Narratives, data flow models, flowcharts
Is the blueprint or map that describes how the
system is set up and operates
Usage:
Daily by new and existing employees
Process re-engineering / improvement
Management and implementation of controls
Auditor review
Essential to achieving the organisations objectives
Why learn systems documentation?
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Sarbanes-Oxley states that management:
is responsible for internal control system
is responsible for assessing the effectiveness of the
internal control (IC) System
ASA (ISA NZ) 315 Par.18 states:
- ‘The auditor shall obtain an understanding of the information system, including the related business processes, relevant to financial reporting…’
To complete these tasks, it is essential for management, the accountant, auditors and other staff to develop, implement and understand the different types of documentation.
Systems Documentation
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Types of systems documentation studied in ACC539:
Data flow diagram (DFD)
Context Diagram
Level 0 DFD
Level 1 DFD
Flowcharts
Document flowcharts
Systems flowcharts
Program flowcharts
When documenting
systems….
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All forms of systems documentation must be consistent with each other within an organisation as:
They are different pictures of the same process / system.
Base information required for all forms of systems documentation is the same.
Generally prepared and revised with a software package e.g. Microsoft Office Visio
Good starting point is a Narrative or a Narrative Table.
Dataflow Diagrams (DFD’s)
Dataflow diagrams graphically describes the flow of data within an organisation.
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The four elements of a
DFD are:
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10 Copyright ©2013 Pearson Australia (a division of Pearson Australia Group Pty Ltd) – 9781442542594/Romney/Accounting Information Systems/1e
| Symbol | Name | Explanation |
| Square: | Entity | Represents either a source of data OR a destination of data Can be a person or organisation |
| Line: | Data Flow | Flow of data into or out of a process (can be a curved or straight line) |
| Circle: | Transformation Process | Processes that transform data from inputs into outputs |
| Parallel lines: | Data Store | Represents data at rest ie in storage |
Context Diagrams
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The context diagram:
Highest level of data flow diagram (most general).
Provides a representation of the system of interest.
Purpose: show inputs and outputs into system (external entities = squares)
Is an overview of the data flow but says nothing about what actually happens in the process.
Does not depict data stores.
There can be only 1 ‘System of Interest’ (ie only 1 circle) and no data stores.
Guidelines for preparing
a context diagram
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Identify the system of interest / process (circle).
Identify the external entities (square).
Identify any data flows between the external entities and the system of interest / process.
Draw in the data flows (lines with arrow heads, labelled with the detail of the data flowing).
Lets practice
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Prepare a context diagram of the following Cash Payments Process
Receives an invoice
Processes the invoice
Makes a payment
Ensures it is correctly recorded in the system
1.0 Cash Payments
Accounts Department
Vendor
Invoice details
Remittance advice and payment details
Payment Details
Sample Context Diagram - Cash Payments Process
Levels of DFD’s
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Level-0:
Purpose: show all major activity steps of a system
Characteristics: processes are labeled 1.0, 2.0…
Level-1:
Purpose: show one major activity divided into sub- activities
Characteristics: processes are labeled 1.1, 1.2…
DFD Level 0 and Level 1 Creation Guidelines
Understand the system.
Ignore certain aspects of the system.
Determine system boundaries.
Develop a context DFD.
Identify data flows.
Group data flows.
Identify transformational processes.
Group transformational processes.
Identify all data stores.
Identify all sources and destinations.
Label all DFD elements.
Subdivide DFD.
Give each process a sequential number.
Repeat the process.
Prepare a final copy.
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Sample DFD
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Considine et al, Accounting Information Systems, page 106
Level 1 DFD
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Content
Flowcharts
Flowcharts use a standard set of symbols to describe pictorially transaction processing procedures a company uses and the flow of data through a system.
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Types of Flowcharts
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Document:
Illustrates the flow of documents through an organisation
Useful for analysing internal control procedures. System:
Logical representation of system inputs, processes and outputs
Useful in systems analysis and design. Program:
Represent the logical sequence of program logic.
Flowcharts symbols
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Types of Symbols:
Input / Output
Processing
Storage
Miscellaneous
Flowchart symbols
cont..
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Guidelines for Preparing Flowcharts
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Understand the system before flowcharting it
Identify entities to be flowcharted
Divide the flowchart into columns
Flowchart normal flows of operations
Organise the flowchart
Give the flowchart a clear
beginning and ending
Use the standard flowcharting symbols
Clearly label all symbols
Multiple copies of documents
Manual processing symbols
Page connectors
Use arrowheads on all flow lines
Multiple pages
Show documents or reports in the column where they are created
Files
Draw a rough sketch of the flowchart
Redesign the flowchart
Verify its accuracy
Draw a final copy
Document Flowchart
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Document Flowchart
cont…
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System Flowchart
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Program Flowchart
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What are the errors in
this context diagram?
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Considine et al, Accounting Information Systems, problem 5.3
Comprehensive Question
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Accuflow Cash Payments
SoftData, a vendor, sends an invoice to Accuflow for data warehousing support services. The invoice is sent directly to Megan Waters, the accounts payable clerk, who manually records the invoice in the accounts payable subsidiary ledger. Once the invoice is recorded, it is forwarded to Stan Phillips, the cash payments clerk, for processing. Stan prepares a cheque to pay the invoice and sends the cheque and invoice to John Sterling, the company treasurer. John approves and signs the cheque and cancels (marks as ‘paid’) the invoice. John then mails the cheque back to SoftData and returns the cancelled invoice to Stan for recording in the cash payments journal and filing. Once a week, Megan manually posts payments from the cash payments journal to the accounts payable subsidiary ledger.
Comprehensive Question
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cont…
Prepare a document flowchart, a context diagram, a level 0 DFD, and a level 1 DFD for the Accuflow cash payment process.
Discussion Question 3.2
Do you agree with the following statement? “Any one of the systems documentation procedures can be used to adequately document a given system.” Explain.
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Post Workshop Activities
Complete all exercises on your activity sheet which were not completed in your workshop.
If you need to further practice drawing systems documentation, questions Problem 3.11 on page 84 and 85 should be attempted.
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Before your next class you need to…
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Complete the post workshop activities for this week
Prepare a summary for this topic.
Complete the readings for next week.
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