Systems Documentation

Techniques
Chapter 3

3-1
Learning Objectives
1.  Prepare and use data flow diagrams to
understand, evaluate, and document
information systems.

2.  Prepare and use flowcharts to understand,

evaluate, and document information systems.

3.  Prepare and use business process diagrams to

understand, evaluate, and document
information systems.

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What Is Documentation?
• Set of documents and models
▫  Narratives, data flow models, flowcharts and
other written material that explain how the
system works.
• Describe who, what, why, when, and
where of systems:
▫  Input, process, storage, output, and controls

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Use Documentation
• How do accountants use documentation?
▫  At a minimum, they have to read documentation
to understand how a system works.
▫  They may need to evaluate the strengths and
weaknesses of an entity’s internal controls.
–  Requires heavy reliance on documentation.
▫  They may peruse documentation to determine if a
proposed system meets the needs of its users.
▫  They may prepare documentation to:
–  Demonstrate how a proposed system would work
–  Demonstrate their understanding of a system of internal
controls
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
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1.Data Flow Diagrams (DFD)

Focuses on the data flows for:

•  Processes
•  Sources and destinations of the data
•  Data stores

DFD are visually simple, can be used to represent

the same process at a high abstract or detailed
level.

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Data Flow Diagrams
•  Graphically describes the flow of data within a
system
•  Four basic elements

Entity Data Flow

Process

Data stores

3-7
Basic Data Flow Diagram Elements

3-9
DATA FLOW DIAGRAMS
•  Data sources and destinations (External entities)
▫  Appear as squares
▫  Represent organizations, individuals, or
organizational units that send or receive data used or
produced by the system
•  An item can be both a source and a destination
•  Used to define system boundaries
•  Named with a noun
DATA FLOW DIAGRAMS
•  Data sources and
destinations (sink) are
marked in red. Accounts
•  Can you tell which are Receivable
sources and which are
destinations?

Customer Remittance Receivables

payment 1.0 2.0
data Information Credit
Customer Process Update
Payment A/R Manager

Deposit

Bank
DATA FLOW DIAGRAMS
• Data flows
▫  Appear as arrows, named with nouns
▫  Represent the flow of data between sources
and destinations, processes, and data stores
▫  A data flow can be used to represent the
creation, reading, deletion, or updating of data
in a file or database (data store).
▫  At least one end of every data flow should
either come from or go to a process.
DATA FLOW DIAGRAMS
• Processes
▫  Appear as circles
▫  Represent the transformation of data
▫  Must be numbered and labeled with a single
action verb and an object
▫  Avoid the use of two verbs in the process name
DATA FLOW DIAGRAMS
•  The processes are shown in red.
•  Every process must have at least
one data inflow and at least one data
Accounts
outflow.
Receivable

Customer Remittance Receivables

payment 1.0 2.0
data Information Credit
Customer Process Update
Payment A/R Manager

Deposit

Bank
DATA FLOW DIAGRAMS
• Data stores
▫  Appear as two horizontal lines, named with a
noun
▫  Represent a temporary or permanent data
repository
▫  Flow out of a data store = retrieval
▫  Flow into a data store = inserting or updating
▫  Data stores on a DFD are related to entities on
an ERD
DATA FLOW DIAGRAMS
•  Subdividing the DFD:
▫  Few systems can be fully diagrammed on one
sheet of paper, and users have needs for differing
levels of detail.
▫  Consequently, DFDs are subdivided into
successively lower levels to provide increasing
amounts of detail.
▫  Some data inputs and outputs will not appear on
the higher levels of the DFD but appear as the
processes are exploded into greater levels of detail.
DATA FLOW DIAGRAMS
• The highest level of DFD is called a
context diagram.
▫  It provides a summary-level view of the
system.
▫  It depicts a data processing system and the
external entities that are:
–  Sources of its input
–  Destinations of its output
▫  The process symbol is numbered with a “0”
DATA FLOW DIAGRAMS
Govt.
Depart- Agencies
ments

0
Employee checks
Payroll Employees
Processing
System

Bank
Human
Resources

•  This is the context diagram for the

Manage-
S&S payroll processing system
ment
DATA FLOW DIAGRAMS
•  A Level 0 diagram is a projection of the process on the
Context diagram. It is like opening up that process and
looking inside to see how it works – to show the internal
sub-processes
•  On a Level 0 diagram, you repeat the external entities
but you also expand the main process into its
subprocesses. Also data stores will appear at this level.
•  The Level 0 diagram must “balance” with the Context
diagram. This means they should both have the same
external entities with the same flows to and from those
entities.
 DATA FLOW DIAGRAMS
Depart-
ments Employees
Employee
New employee Time checks
Human form cards
Resources
1.0
Update 2.0
Employee Pay Payroll
empl.
Change Employ- check
Payroll Bank
form
file ees

Payroll
Disburse-
3.0 ment data 5.0
Employee/
This diagram Prepare
reports Payroll file
Update
Gen.
shows the next Ledger
level of detail Payroll tax
disb. voucher
for the context Payroll
report
diagram 4.0 General
Pay Ledger
taxes Tax report
Manage- & payment
ment Govt.
Agencies
DATA FLOW DIAGRAMS
Depart-
ments Employees
Employee
New employee Time paychecks
Human form cards
Resources
1.0
Update 2.0
Employee Pay Payroll
empl.
Change check
form
Payroll Employ- Bank
file ees
Suppose we Payroll
exploded Process 3.0
Disburse-
ment data 5.0
2.0 (pay Prepare Employee/ Update
employees) in the reports Payroll file Gen.
next level. The Ledger
Payroll tax
sub-processes disb. voucher
Payroll
would be numbered report
General
2.1, 2.2, 2.3, etc. 4.0
Pay Ledger
taxes Tax report
Manage- & payment
ment Govt.
Agencies
DATA FLOW DIAGRAMS
•  A Level 1 diagram is a projection of a Level 0
process.
•  A Level 1 diagram shows all the processes that
comprise a single process on the level 0 diagram.
•  It shows how information moves from and to each of
these processes.
•  Level 1 diagrams may not be needed for all Level 0
processes.
•  On Level 1 diagrams we do not repeat external
entities. Data stores may not be repeated either.
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 DFD’s 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.
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2.FLOWCHARTS
•  A flowchart is an analytical technique that
describes some aspect of an information system
in a clear, concise, and logical manner.
•  Flowcharts use a set of standard symbols to
depict processing procedures and the flow of
data.
FLOWCHARTS
•  Every shape on a flowchart depicts a unique
operation, input, processing activity, or storage
medium.
•  Before PC’s were common, flowcharts were
commonly drawn with templates.
•  Now, it is more common to use a software
program such as Visio.
▫  Microsoft word and Power Point are also used
▫  The software uses pre-drawn shapes, and the
developer drags the shapes into the drawing.
2. 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, show manual vs.
automated processes.

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Flowcharts Symbols

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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

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DOCUMENT FLOWCHARTS
•  A document flowchart shows the flow of
documents and information among areas of
responsibility in an organization.
•  These flowcharts trace a document from origin
to disposition and show:
▫  Where a document comes from
▫  Where it’s distributed
▫  How it’s used
▫  It’s ultimate disposition
▫  Everything that happens as it flows through the system
DOCUMENT FLOWCHARTS

•  Internal control flowcharts are document

flowcharts used to evaluate the adequacy of
internal controls, such as segregation of duties or
internal checks.
•  They can reveal weaknesses or inefficiencies such
as:
▫  Inadequate communication flows
▫  Unnecessarily complex document flows
▫  Procedures that cause wasteful delays
•  Document flowcharts are also prepared in the
system design process.
GUIDELINES FOR PREPARING A DOCUMENT
FLOWCHART
•  Let’s step through some guidelines for preparing
a document flowchart:
▫  As with DFDs, you can’t effectively prepare a
flowchart if you don’t understand the system, so:
–  Interview users, developers, auditors, and
management.
–  Administer questionnaires.
–  Read through narratives.
–  Walk through systems transactions
GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART
▫  Identify:
–  All departments using the system (the parties who
“do” things in the story)
–  All documents or information flows
–  All processes performed on the documents
▫  As you read through a narrative, you may
want to mark the preceding items with
different shapes (e.g., drawing a rectangle
around entities, circling documents, etc.).
GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART
▫  Use separate columns for the activity of
each department.
–  Example: If there are three different
departments or functions that “do” things in
the narrative, there would be three columns
on the flowchart.
GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART
▫  Flowchart the normal course of operations, and
identify exceptions with annotations.
▫  As much as possible, the flow should go from top
to bottom and left to right.
▫  Use standard flowcharting symbols, and draw with
a template or computer.
▫  Clearly label all symbols. Use annotations if
necessary to provide adequate explanation.
▫  Show where each document originated and its
final disposition.
GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART

▫  Every manual process should have at least one

input and at least one output.
▫  If a document goes into a process it must come
out
▫  Do not show process symbols for:
–  Forwarding a document to another
department
–  Filing a document
Forwarding
a document
 Filing
a document
GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART
▫  Do not connect two documents except when
forwarding to another column.
–  When a document is forwarded, show it in
both locations.
▫  When using multiple copies of a document, place
document numbers in the upper, right-hand
corner.
▫  Show on-page connectors and label them clearly
to avoid excess flow lines.
▫  Use off-page connectors if the flow goes to another
page.
SYSTEM FLOWCHARTS

•  A system flowchart depicts the relationship

among the inputs, processes, and outputs of an
AIS.
•  They are a pictorial representation of automated
processes and files
▫  The system flowchart begins by identifying the inputs
to the system.
▫  Each input is followed by a process, i.e., the steps
performed on the data.
▫  The process is followed by outputs—the resulting new
information.
System
Flowchart
Shown in
Figure 3.10
in your
textbook
PROGRAM FLOWCHARTS

•  Program flowcharts illustrate the sequence of

logical operations performed by a computer in
executing a program.
•  They also follow an input – process – output
pattern.
•  The program flowchart from
Figure 3.11 in your textbook is
shown on the right.
3.Business Process Diagrams
•  Is 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

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Business Process Diagram Basic
Symbols

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Payroll Business Process Diagram
Example

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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)
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