Chapter 3:

SYSTEM DOCUMENTATION
(Subject code: 201085)

Prepared by: Accounting department 3

 Objectives of Chapter 3

❑ The importance of systems documentation was

emphasised

❑ Addressed the uses of systems documentation

❑ Legislative requirements have impacted on

systems documentation (internal controls)

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 Objectives of Chapter 3 (Cont)

❑ Defined process maps, data flow diagrams and

systems flowcharts

❑ Worked through the procedures for drawing up

differing types of documentation

❑ Compared and contrasted the different forms of

documentation

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 Contents

3.1 The Purpose & role of systems documentation

3.2 Process Redesign & Re-Engineering

3.3 Reading Document System

3.4 Document decribing the System

3.5 Introduce the software for SD

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 The Purpose & Role of SD

❑ Systems documentation is a way of visually

depicting the operations of a system
❑ A process map is a simple graphical
representation of a business process
❑ Data flow diagrams are graphical
representations of the data flows that occur
within a system
o Physical data flow diagram
o Logical data flow diagram

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 The Purpose & Role of SD (Cont)

❑ The context diagram provides a representation

of the system and the entities that provide inputs
to, or receive outputs from, the system of interest

❑ Systems flowcharts illustrate a system and its

inputs, processes and outputs in more detail
than a process map or data flow diagram,
providing information about the documents and
processes performed within the system, as well
as who is involved in the system

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 Process Redesign &
Re-Engineering and Systems

❑ Systems documentation provides an overview

of the sequence of activities in the business
process

❑ Prior to undertaking any redesign it is essential

that the current system be fully understood

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 Process Redesign &
Re – Engineering and Systems (Cont)

❑ The key piece of knowledge that an accountant

can offer the organisation in situations of
implementing new systems, designing new
systems or adopting modifications to a system is
the need for well designed internal controls

❑ Systems documentation is important in preserving

the knowledge of a process’s operations

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 Auditing & Systems Documentation

❑ Systems documentation plays a key role in

the audit of GPFRs
o ASA 200
o ASA 315 para 95
o ASA 315 para 18 (a) & (b)
❑ The auditor will be concerned with how data
is handled, the steps that are followed, the
internal controls built into the process and
the potential for material errors to occur

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 The Law & Systems Documentation

❑ Auditors are facing legislative pressure to

use systems documentation
o Australian Auditing Standards have legal backing

❑ Sarbanes Oxley Act has implications for

Australian companies listed on US stock
markets as well as Australian subsidiaries of
US companies

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 Reading Systems Documentation

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 Reading Systems Documentation (Cont)

❑ Entities: Any person, place or thing

involved in a process, including people
and computers
o External entity
o Internal entity

❑ A structured narration is a written

description of how a process operates
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 Structured Narrative Table (Cont)

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 Structured Narrative Table (Cont)

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 Document describing the system

1 2 3

Process Data Elements

1.4 Definition
Map & Flows
the evolutionofof
AISAIS
Diagram

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 Process Maps

❑ A process map is a simple

graphical representation
of a business process

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 Rules for Reading Process Maps

1. The functional areas appear down the left-

hand side of the diagram

2. The functional areas are separated with a

solid line

3. The subfunctions are separated with a

dashed line

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 Rules for Reading Process Maps (Cont)

4. Two standard symbols are used: a rectangle

for a process and a diamond for a decision

5. Lines that connect processes are labelled with

documents

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 Rules for Reading Process Maps
(Cont)

6. Process rectangles describe processes not

documents

7. The process map reads left to right and top to

bottom

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 Process Map

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 Data Flow Diagrams

❑ There are three types of data flow

diagrams:

1. A context diagram
2. A physical data flow diagram
3. A logical data flow diagram

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 Data Flow Diagram Symbols

External entity

System of interest for a context diagram

Internal entity for a physical data flow
diagram
Process for a logical data flow diagram

Data Store

Data Flow
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 Context Diagram

❑ The context diagram provides a representation

of the system and the entities that provide inputs
to, or receive outputs from, the system of interest

❑ It is an overview of the data flow and says

nothing about what actually happens in the
process

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 Sample Context Diagram
– Ordering Process

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 Sample Physical Data Flow
Diagram – Ordering Process

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 Sample Logical Data Flow
Diagram Ordering Process

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 Level 0 & Level 1 DFDs

❑ Level 0 data flow diagram: the highest

level logical data flow diagram providing an
overarching view of the processes that
occur

❑ Level 1 data flow diagram: the second

level logical data flow diagram that takes
one of the process bubbles from the level 0
diagram and expands it to provide detail
about the activities that occur within the
process

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 Systems Flowcharts

❑ A systems flowchart represents a combination

of the logical and physical data flow diagrams,
because it provides details of the processes that
are performed (logical perspective) as well as the
physical resources that are used to perform them
(physical perspective)

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 Common Flowchart Symbols

Stop/start or Single
external document
entity

Process Paper data

store

Decision Manual
point keying

Disc storage Manual

process

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 Balancing a Data Flow Diagram

❑ Diagrams (context, physical data flow and

logical data flow) with the same external
entities and flows to and from these external
entities are called balanced data flow
diagrams

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 Drawing Systems documentation

❑ Key Questions to Consider:

o Who are the people and things that perform
activities?

o What activities are being performed by each

entity?

o What are the inputs and outputs for each

activity?

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 Preparing a Process Map

1. Identify entities and divisions

2. Draw the lines for each division

3. Indicate any subfunctions

4. Illustrate the activities of each entity

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 Steps in Drawing a Context Diagram

1. Identify the system of interest

o Draw a bubble and label it to represent the
system of interest

2. Identify the external entities

o Draw and label a rectangle for each external
entity

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 Steps in Drawing a Context Diagram
(Cont)

3. Identify any data flows between the external

entities and the system of interest

4. Draw in the data flows connecting the external

entities and system of interest and label them
accordingly

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 Drawing a Physical Data Flow Diagram

1. Identify the external entities

o Draw and label a rectangle for each
external entity

2. Identify the internal entities and list them in

the order they appear in the system’s
operation

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 Drawing a Physical Data Flow Diagram
(cont)

3. Draw in a bubble for each internal entity and

label the entities accordingly

4. Identify any data flows between external

entities and internal entities
o Draw in these flows and label the data
flow arrows

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 Drawing a Physical Data Flow Diagram
(cont)

5. Identity the data flows between the internal

entities
o Draw in the data flows between internal
entities and label the arrows with the
physical document/ information that is
being sent or received.

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 Drawing a Physical Data Flow Diagram
(cont)

6. Identify any data stores that are

accessed to get data or to store data
as part of the process. These may be
paper-based or electronic
o Draw these data stores in and link them
to the entity that accesses them by
including data flow arrows

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 Drawing Logical Data Flow Diagrams

1. Identify the external entities

2. Eliminate entities that just send or receive

items and any activities that are just send or
receive

3. Group remaining information processing

activities based on the underlying process
they perform

4. Number and label the underlying process

performed by the group of activities
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 Drawing Logical Data Flow Diagrams
(cont)

5. Identify any data flows between external

entities and processes

6. Identify the data flows between the

processes
7. Identify any data stores that are accessed to
get data or to store data

8. Ensure your logical data flow diagram

balances with your physical data flow
diagram and context diagram
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 Rules for Drawing a Flowchart

1. Avoid flows that cross over multiple entities

2. Make sure that if a document enters the

system, you also show where it ends up

3. Where a document is copied, number the

copies

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 Rules for Drawing a Flowchart (Cont)

4. Documents moving from entity to entity should

be shown in each column

5. The filing of documents does not require a

manual process

6. Processes should have an input and an output

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 Rules for Drawing a Flowchart (Cont)

7. Only document normal processing operations

of the system

8. Where necessary use annotations to clarify or

explain ambiguities

9. Ensure that symbol labels add meaning

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 Comparing the Different
Documentation Techniques

❑ The process map gives an overall view of the

organisation’s process design and allows the
interactions among entities to be seen

❑ The systems flowchart also shows the entities

and the tasks they perform

❑ The process map and the systems flowchart

provide a very comprehensive picture of a
business process : Mô tả 1 bức tranh toàn diện về bức tranh của tổ chức
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 Comparing the Different
Documentation Techniques (cont)

❑ Data flow diagrams provide less detail

❑ The context diagram can be expanded into

the physical & logical data flow diagrams

❑ One form of documentation should not be

viewed as superior

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 Review of Chapter 3

❑ The importance of systems documentation was

emphasised

❑ Addressed the uses of systems documentation

❑ Legislative requirements have impacted on

systems documentation (internal controls)

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 Review of Chapter 3 (cont)

❑ Defined process maps, data flow diagrams and

systems flowcharts

❑ Worked through the procedures for drawing up

differing types of documentation

❑ Compared and contrasted the different forms of

documentation

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 Key Terms

o Balanced DFDs o Logical DFD

o Context diagram o Physical DFD
o Data Flow Diagrams (DFDs) o Process map
o Entity (internal & external) o System of interest
o Level 0 & 1 DFD o Systems flowchart

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