Accounting Information Systems

Fifteenth Edition, Global Edition

Chapter 3
Systems Documentation
Techniques

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

• Prepare and use business process diagrams to

understand, evaluate, and document information systems.
• Prepare and use flowcharts to understand, evaluate, and
document information systems.

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System Documentation Techniques
• System Documentation : Documents that
describe the system itself and its parts, i.e.
explain how the system works.

• Techniques:
– Narrative
– Diagrams
– Flowcharts

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Documentation tools are important on one or
more of the following levels:
Reading documentation to determine how
the system works.
Evaluating internal control systems
documentation to identify control strengths
& weaknesses and recommend
improvements. Also to determine if the
system meets the company’s needs.
Preparing documentation. If you’re a
member of a team that is developing a new
system, then you must prepare
documentation to show how• Copyright
both© 2021the
Pearson Education Ltd.
Why Document Systems?
• Accountants must be able to read documentation and
understand how a system works (e.g., auditors need
to assess risk)
• Corporate governance regulations require
management to assess internal controls and auditors
to evaluate the assessment.
• Used for systems development and changes

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 Data Flow Diagrams (DF D)

DF D graphically describes the flow of data within an

organisation.

DFD has four basic elements:

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

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Data Flow Diagrams (DF D): elements

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Data Flow Diagrams (DF D): elements

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Data Flow Diagrams (DF D): elements

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Context Diagram for S&S Payroll Processing
Subdividing the DFD
• DFDs are subdivided into successively lower
levels to provide ever-increasing amounts of
detail, as very few systems can be completely
diagrammed on a single sheet of paper.
Additionally, users have varying needs, and
employing multiple levels can more effectively
cater to these diverse requirements.

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Level 0 DFD for S&S Payroll Processing
Level 1 DFD for Process 2.0 in S&S Payroll Processing
Basic Guidelines for Creating a D F D
1. Understand the system that you are trying to represent.
2. You need to consider what is relevant and what needs to be included.
3. Start with a high level (context diagram) to show how data flows
between outside entities and inside the system. Use additional DF Ds at
the detailed level to show how data flows within the system.
4. Identify and group all the basic elements of the D F D.
5. Name data elements with descriptive names, use action verbs for
processes (e.g., update, edit, prepare, validate, etc.).
6. Give each process a sequential number to help the reader navigate
from the abstract to the detailed levels.
7. Edit/Review/Refine your D F D to make it easy to read and understand.

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Business Process Diagrams (BPD)
• 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 (BPM N: Business Process
Modeling Notation).
• E.g., there are many activities in the revenue cycle
( receiving an order, checking customer credit, verifying
inventory availability, and confirming customer order
acceptance). All of these activities can be represented on a
BPD to provide the reader with a clear and easily
understandable visual overview of the processes within a
business.

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Business Process Diagram Symbols

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Business Process Diagram of Payroll Processing at S&S

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Flowcharts
• A flowchart is a visual, analytical technique employed to
depict various facets of an information system in a clear,
concise, and logical manner.
• Flowcharts document how business processes are
executed and how documents go through the organization.

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Flowcharts
Describe (using symbols) an information system showing:
• Inputs and outputs
• Information activities (processing data)
• Data storage
• Data flows

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Common Flowcharts Symbols

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 Types of Flowcharts
• Document flowcharts: show the flow of documents and data
for a process.
They trace a document, showing its origin, distribution,
purpose, disposition, and everything that occurs as it flows
through the system.
E.g. internal control flowchart to pinpoint system weaknesses
or inefficiencies, such as inadequate communication flows,
insufficient segregation of duties, unnecessary complexity in
document flows, or procedures responsible for causing wasteful
delays.

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 Types of Flowcharts
• System flowchart: depicts the relationship among
input, processing, and output data processing cycle for
a process (see next slide).
• Program flowchart: illustrates the sequence of
logical operations performed by a computer in executing
a program (using programming software e.g. C++,
Java…etc).

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The sales processing flowchart

The terminals will capture

and edit sales data and print
customer receipts.

Periodically, the terminals

send all sales data to
corporate headquarters to
update the accounts
receivable, inventory,
sales/marketing databases,
and the general ledger.

Management and other

users can access the files at
any time using an inquiry
processing system.
Prepare flowcharting segments for each of the
following operations:
• querying a database and printing the query result:

• using a terminal to enter paper-based source document data and send it to a

remote location where a corporate computer updates the company database.

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Make an airline reservation online from your home computer
use a terminal to enter employee hours recorded on time cards to update both
the payroll transaction file and the wage data in the payroll master file
Key Terms
• Documentation • Program flowchart
• Narrative description • Data flow diagram (DF D)
• Business process diagram (BP D) • Data source
• Flowchart • Data destination
• Document flowcharts • Data flow
• Internal control flowcharts • Processes
• System flowchart • Data store
• Context diagram

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