Denmark Corporation sells computer equipment to businesses in the western region of the
United States. Each month, the IT division at Demark Corporation prints monthly
statements and sends them to the accounts receivable (AR) department, where a clerk
mails them to the customers. This corporation’s customers mail their payments back to
Denmark, where a clerk in AR batches the checks and sends them to the cashier. The AR
clerk then uses the payment stub to enter the payments into the computer, where the AR
master data are updated to record the payment. Please use this to complete the diagrams
and charts below. Please use excel or word for the diagrams.
Problem 1: Create a table of entities and activities.
Table of Entities:
Entities
Step
s Activities Details
IT Division 1 Prints Monthly statement Print invoice
2
Sends invoices to accounts receivable
department
Accounts Receivable
Clerk 3 Mails invoices to corresponding customers
Customer 4 Writes check to company
5 Sends check to Denmark- AR clerk
Accounts Receivable
Clerk 6 Batches the checks
7 Sends checks to cashier
8
Enters payments into the system from check
stubs
Records
payments
Cashier 9 Receives batched checks
Problem 2: Draw a context diagram to support the entities in problem 1.
Problem 3: Draw a physical FDF.
Creates a new customer account in the master data
Sends the monthly statements to AR
Enters payments- automatically updates the master data
Batches the checks
Sends check batches to cashier
mails invoice/statement
Makes a purchase on credit
mails out payment to Denmark
CUSTOMER
AR
CASHIER
IT
Accounts Receivable
Department
IT
Department
Cashier
Department
Customer/Client
Problem 4: “PCAOB Audit Standard No. 5 (AS5) paragraph 37 and Statement on Auditing
Standard Section 319 (AU 319) paragraph 75 suggest that management, business process
owners, and auditors prepare and analyze systems documentation to understand the flow
of transactions through a process and to identify and assess the effectiveness of the design
of internal controls. However, organizations, internal audit departments, and public
accounting firms have developed their own methods for documenting systems. Therefore, I
am not going to learn to prepare systems documentation until I know exactly what
technique I will need to use in my job.” Do you agree? Discuss fully.
To be quite honest, I leave this sort of thing to the IT department and let that department tell me
what they need from me based on my accounting expertise. While I have done that in the past, I
disagree with the statement mentioned above, “…I am not going to learn to prepare systems’
documentation until I know exactly what technique I will need to use in my job.” Learning how
transactions flow through can help a person develop techniques that fit them based on how the
data is being analyzed. Learning all the steps and how they are connected will make it easier to
understand and prepare system documentation. PCAOB No 5 is an audit of internal controls
over financial reporting that is integrated with an audit of financial statements (PCAOB, 2023).
While there are many methods of documenting systems, each company should have one uniform
system of documentation. System documentation is extremely important and gives an overview
of the whole system while providing stakeholders and engineers an understanding of the
technology that helps streamline the company (AltexSoft, 2019). I believe that learning on the
job is critical, and repetition makes perfect. While the mentioned above quote is coming from a
small-minded person, how can you know what type of system documentation one needs to
prepare if this person has never prepared one before and is waiting to learn the specific technique
needed for his/her job. In my opinion, I would create my own method of system documentation
and as I understand my job better, I can adjust and make changes accordingly. When creating a
method of system documentations, you develop skillsets in understanding how to create proper
data flow diagrams with accurate flow charts and information graphs. Creating systems’
documentation becomes easier the more it is done and the understanding of how a business is
structured versus how it needs to be structured becomes easier to comprehend and replicate.
Problem 5: At Resource Grocery, shoppers unload their groceries for a salesclerk to
process to receive payment. The salesclerk enters the sale in a cash register and puts the
money in the register drawer. At the end of the day, the salesclerk gives the cash and the
register tape to the cashier. The cashier reconciles to make sure all funds are accounted for.
Please create a table for the process and provide a diagram of the table.
Table of Entities:
Entities Steps Activities Details
Shopper 1 Selects groceries and goods to
purchase
2 Gives the groceries to the cash
register clerk
Cash
register
Clerk
3 Scans groceries Deisplays total due from the customer
Shopper 4 Pays for the groceries
Cash
register
Clerk
5 Places cash into the register
6 Give cash along with register
tape to the cashier
Records payment
Cashier 7 verifies that register tape and
cash balances
8 Reconciles
No matter what one does in their personal or professional life, ethics and morals must be taken
into consideration. When any type of documentation takes place there are key aspects to
consider such as transparency, confidentiality, accountability, and safety and security. All of this
starts when the initial system is built. From the beginning, the company’s mission and vision
should align with the design, data and risk mitigation should be developed, and controls need to
be established and continuously tested for integrity. How a system is set up is based on the
moral and ethical judgment of the techs involved from the beginning to the end process. Psalm
128:2 says, “You will definitely enjoy what you’ve worked hard for- you’ll be happy; and things
will go well for you” (Berry, 2022). Honest and hard work always pays off.
Cited Work:
Altexsoft. (2019, December 9). Technical documentation in software development: Types, best
practices, and Tools. AltexSoft. Retrieved February 11, 2023.
Auditing standard no. 5. PCAOB. (2023). Retrieved February 9, 2023.
Berry, E. (2022, December 29). 15 Bible verses about hard work to boost your determination.
Woman's Day. Retrieved February 9, 2023.
Gelinas, U. J., Dull, R. B., Wheeler, P. R., & Hill, M. C. (2018).5Accounting information
systems5(11th ed.) Boston, MA: Cengage Learning.
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