ACC 100: Accounting Information System

Students Activity Sheet #4

Name: Class number:

Section: Schedule: Date:

Lesson title: Introduction to Transaction Processing Materials:

Lesson Objectives: FLM Student Activity Sheets
1) Differentiating documentation techniques
References:
Principles of Accounting
Information Systems by James
A. Hall

Challenges are what make life interesting. Overcoming them is what makes life
meaningful. – Joshua J. Marine

A. LESSON PREVIEW / REVIEW

1) Introduction
Welcome! Accurate and up to date documentation makes your components, applications,
web services, schemas and databases easier to use and maintain, reducing support
requirements whilst improving quality and productivity. Let’s be productive and learn
documentation techniques.

Please read the learning targets before you proceed to the succeeding activities. The
learning targets are your goals. Remember, you need to achieve your learning targets at
the end of the lesson.

2) Activity 1: What I Know Chart

What do you know about Documentation Techniques? Try answering the questions below
by writing your ideas under the What I Know column. You may use key words or phrases
that you think are related to the questions.

What I Know Questions: What I Learned (Activity 4)

What are the commonly used
systems design and documentation
techniques?

B. MAIN LESSON
1) Activity 2: Content Notes
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 ACC 100: Accounting Information System
Students Activity Sheet #4

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Section: Schedule: Date:

Documentation Techniques

The old saying that a picture is worth a thousand words is extremely applicable when it comes to
documenting systems. A written description of a system can be wordy and difficult to follow.
Experience has shown that a visual image can convey vital system information more effectively and
efficiently than words. As both systems designers and auditors, accountants use system
documentation routinely. The ability to document systems in graphic form is thus an important skill
for accountants to master.

Five common documentation techniques:

 Entity Relationship Diagram
 Data Flow Diagrams
 Document Flowcharts
 System Flowcharts
 Program Flowcharts
 Record layout diagrams

Data Flow Diagrams (DFD)

 use symbols to represent the processes, data sources, data flows, and entities in a system
 represent the logical elements of the system
 do not represent the physical system

The data flow diagram (DFD) uses symbols to

represent the entities, processes, data flows,
and data stores that pertain to a system.
Entities in a DFD are external objects at the
boundary of the system being modeled. They
represent sources of and destinations for
data. Entities may be other interacting
systems or functions, or they may be external
to the organization. Entities should always be
labeled as nouns on a DFD, such as customer
or supplier. Data stores represent the
accounting records used in each process, and
labeled arrows represent the data flows
between processes, data stores, and entities

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Entity Relationship Diagram (ERD)

 A documentation technique to represent the relationship between entities in a system.
 The REA model version of ERD is widely used in AIS. REA uses 3 types of entities:
 resources (cash, raw materials)
 events (release of raw materials into the production process)
 agents (inventory control clerk, vendor, production worker)
The figure shows the symbol set used in an
ER diagram. The square symbol represents
entities in the system. The labeled connecting
line represents the nature of the relationship
between two entities. The degree of the
relationship, called cardinality, is the
numerical mapping between entity instances.
A relationship can be one-to-one (1:1), one to-
many (1:M), or many-to-many (M:M).2 If we
think of entities in the ER diagram as files of
records, cardinality is the maximum number of
records in one file that are related to a single
record in the other file and vice versa.
Cardinality reflects normal business rules as well as organizational policy. For instance, the 1:1
cardinality in the first example in the figure above, it suggests that each salesperson in the
organization is assigned one automobile. If instead the organization’s policy were to assign a single
automobile to one or more salespersons who share it, this policy would be reflected by a 1:M
relationship. Similarly, the M:M relationship between vendor and inventory in the figure implies that
the organization buys the same type of products from one or more vendors. A company policy to
buy items from a single vendor would be reflected by a 1:M cardinality.

Cardinalities
Represent the numerical mapping between entities:
 one-to-one
 one-to-many
 many-to-many

Relationship between ER Diagrams and Data Flow Diagrams

Data flow diagrams and ER diagrams depict different aspects
of the same system, but they are related and can be reconciled.
A DFD is a model of system processes, and the ER diagram
models the data used in or affected by the system. The two

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 ACC 100: Accounting Information System
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diagrams are related through data; each data store in the DFD represents a corresponding data
entity in the ER diagram.

FLOWCHARTS

A flowchart is a graphical representation of a system that describes the physical relationships

between its key entities. Flowcharts can be used to represent manual activities, computer
processing activities, or both. A document flowchart is used to depict the elements of a manual
system, including accounting records (documents, journals, ledgers, and files), organizational
departments involved in the process, and activities (both clerical and physical) that are performed in
the departments.

Document Flowcharts

To demonstrate the preparation of a document flowchart, let’s assume that an auditor needs to
flowchart a sales order system to evaluate its internal controls and procedures. The auditor will
begin by interviewing individuals involved in the sales order process to determine what they do. This
information will be captured in a set of facts like those below. Keep in mind that the purpose here is
to demonstrate flowcharting. Thus, for clarity, the system facts are intentionally simplistic.
1. A clerk in the sales department receives customer orders by mail and prepares four copies of
a sales order.
2. Copy 1 of the sales order is sent to the credit department for approval. The other three
copies and the original customer order are filed temporarily, pending credit approval.
3. The credit department clerk validates the customer’s order against credit records kept in the
credit department. The clerk signs Copy 1 to signify approval and returns it to the salesclerk.
4. When the salesclerk receives credit approval, he or she files Copy 1 and the customer order
in the department. The clerk sends Copy 2 to the warehouse and Copies 3 and 4 to the
shipping department.
5. The warehouse clerk picks the products from the shelves, records the transfer in the stock
records, and sends the products and Copy 2 to the shipping department.
6. The shipping department receives Copy 2 and the goods from the warehouse, attaches
Copy 2 as a packing slip, and ships the goods to the customer. Finally, the clerk files Copies
3 and 4 in the shipping department.

Based on these facts, the auditor can create a flowchart of this partial system. It is important to note
that flowcharting is as much an art form as it is a technical skill, giving the flowchart author a great
deal of license. Nevertheless, the primary objective should be to provide an unambiguous
description of the system. Certain rules and conventions need to be observed:
1. The flowchart should be labeled to clearly identify the system that it represents.
2. The correct symbols should be used to represent the entities in the system.
3. All symbols on the flowchart should be labeled.
4. Lines should have arrowheads to clearly show the process flow and sequence of events.

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 ACC 100: Accounting Information System
Students Activity Sheet #4

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5. If complex processes need additional explanation for clarity, a text description should be included
on the flowchart or in an attached document referenced by the flowchart.

Symbol Set for Document Flowcharts

Flowchart Showing Areas of Activity

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System Flowcharts
 illustrate the relationship among processes and the documents that flow between them
 contain more details than data flow diagrams
 clearly depict the separation of functions in a system

Symbol Set for System Flowcharts

Flowchart Showing All Facts Translated into Visual Symbols

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 ACC 100: Accounting Information System
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Program Flowcharts

Every program represented in a system flowchart should have a supporting program flowchart that
describes its logic.

Accountants sometimes use program flowcharts to verify the correctness of program logic. They
compare flowcharts to the actual program code to determine whether the program is doing what the
documentation describes. Program flowcharts provide essential details for conducting information
technology (IT) audits.
Program Flowchart Symbols

Program Flowchart for Edit Program

2) Activity 3: Skill Building

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 ACC 100: Accounting Information System
Students Activity Sheet #4

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Section: Schedule: Date:

Using the diagram below, answer the following questions:

System Flowchart
a. What do Symbols 1 and 2 represent?

b. What does the operation involving Symbols 3 and 4

depict?

c. What does the operation involving Symbols 4 and 5

depict?

d. What does the operation involving Symbols 6, 8,

and 9 depict?

3) Activity 4: What I know Chart, Part 2

Now let’s check your final understanding of Flexible Learning. I hope that everything about the
topic is clear to you. This time you must fill out the What I Learned column.

Activity 5: Check for Understanding and Keys to Correction

Independent Practice

Select the letter of your choice.

1. Which type of graphical documentation represents systems at different levels of detail?

a) data flow diagram
b) document flowchart
c) system flowchart
d) program flowchart

2. Data flow diagrams

a) depict logical tasks that are being performed, but not who is performing them

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 ACC 100: Accounting Information System
Students Activity Sheet #4

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b) illustrate the relationship between processes, and the documents that flow between
them and trigger activities
c) represent relationships between key elements of the computer system
d) describe in detail the logic of the process

3. Document flowcharts
a) depict logical tasks that are being performed, but not who is performing them
b) illustrate the relationship between processes, and the documents that flow between
them and trigger activities
c) represent relationships between key elements of the computer system
d) describe the logic of the process

4. Which symbol represents a data store?

c.) d.)
a.) b.)

5. Which symbol represents a manual operation?

a.) b.) c.) d.)

6. Which symbol represents accounting records?

a.) b.) d.)
c.)

7. Which symbol represents a document?

a.) b.) c.) d.)

8. Which symbol represents a magnetic tape (sequential storage device)?

a.) b.) c.) d.)

9. Which symbol represents a decision?

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a.) b.) c.) d.)

10. Auditors may prepare program flowcharts to verify the correctness of program logic.
a) True
b) False

C. LESSON WRAP-UP
1) Activity 6: Thinking about Learning
A. Work Tracker
You are done with this session! Let’s track your progress. Shade the session number you just
completed.
P1 P2 P3
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

B. Think about your Learning

1. Please read again the learning targets for the day. Were you able to achieve those learning
targets? If yes, what helped you achieve them? If no, what is the reason for not achieving them?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

2. What question(s) do you have as we end this lesson?

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

KEY TO CORRECTIONS:
Activity 3:
ANS:
a. Symbol 1 is a terminal showing the source or destination of a document or report; symbol 2 is
source document or report.
b. Symbols 3 and 4 depict the entry of data in real time into a system from a computer terminal
c. Symbols 4 and 5 depict the storage/retrieval of data to/from a computer disk
d. Symbols 6,8 and 9 depict the processing of a source document and its placement into a file.

Activity 5:
1. A 2. A 3. B 4. B 5. D
6. A 7. B 8. D 9. A 10. A

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Students Activity Sheet #4

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Section: Schedule: Date:

Rationalization:
1. Data Flow Diagram is graphical documentation that represents systems at different levels of
detail.
2. Data flow diagrams depict logical tasks that are being performed, but not who is performing
them.
3. Document Flowcharts illustrate the relationship between processes, and the documents that
flow between them and trigger activities

1.
FAQs
1. Is a DFD an effective documentation technique for identifying who or what performs a particular
task?
ANS:
No. A DFD shows which tasks are being performed, but not who performs them. It depicts the logical
system.

2. Is a flowchart an effective documentation technique for identifying who or what performs a

particular task?
ANS:
Yes. A flowchart depicts the physical system and illustrates who, what, and where a task is performed.

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