1. Systems Documentation Techniques
Chapter 3

2. INTRODUCTION Documentation includes the following types of tools:
Narratives (written descriptions)
Flowcharts
Diagrams
Other written material
Explains how system works

3. INTRODUCTION
Documentation covers the who, what, when, where, why, and how of:
Data entry
Processing
Storage
Information output
System controls

4. INTRODUCTION
This chapter, will focus on the following documentation tools:
Data flow diagrams
Flowcharts
Business Process Diagrams

5. 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
It has been said that a picture is worth a thousand words, and that certainly is true when it comes to an easy way to understand an organization’s information system. Documenting an information system requires great skill; however, the ability to understand and read a documentation can be quite intuitive.
Although there are many methods used in business to document systems, the text uses the three most popular for accountants: data flow diagrams, systems flowcharts, and Business Process Modeling Notation (BPMN).

6. 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.

7. DATA FLOW DIAGRAMS Data sources and destinations
Appear as squares
Represent organizations or individuals that send or receive data used or produced by the system
An item can be both a source and a destination

8. DATA FLOW DIAGRAMS Data flows Appear as arrows
Represent the flow of data between sources and destinations, processes, and data stores
Labels should describe the information moving

9. DATA FLOW DIAGRAMS Processes Appear as circles
Represent the transformation of data

10. DATA FLOW DIAGRAMS Data stores Appear as two horizontal lines
Represent a temporary or permanent repository of data

11. Basic Data Flow Diagram Elements
There are four basic elements to the data flow diagram:
The square box symbol represents where the data is coming from (source) and where it ends up (destination). An example, from a revenue cycle perspective is that the customer would be a data source.
2. The arrows are symbols showing the directional flow of data from a source to either: a transformative process, data store, or data destination.
The circle is a symbol that shows a transformative process. This can be at a high “context” level such as “process Revenue cycle”; or it could be at a more detailed level such as “sales order entry”
4. The two horizontal lines represent data storage
In addition, you may see a triangle used in a DFD which would identify controls associated with the process.

12. DATA FLOW DIAGRAMS
Example of a data flow diagram of the customer payment process from Figure 3-3 in your textbook.
Accounts
Receivable (H)
(G)
Customer
Payment (B)
Remittance
Data (D)
Receivables
Information (I)
1.0
Process
Payment
(C)
2.0
Update
A/R
(F)
Customer (A)
Credit
Manager
(K)
Deposit (E)
Bank (J)

13. DATA FLOW DIAGRAMS Data sources and destinations are marked in red.
Accounts
Receivable (H)
(G)
Customer
Payment (B)
Remittance
Data (D)
Receivables
Information (I)
1.0
Process
Payment
(C)
2.0
Update
A/R
(F)
Customer (A)
Credit
Manager
(K)
Deposit (E)
Bank (J)

14. DATA FLOW DIAGRAMS Data flows are shown in red. Accounts
Receivable (H)
(G)
Customer
Payment (B)
Remittance
Data (D)
Receivables
Information (I)
1.0
Process
Payment
(C)
2.0
Update
A/R
(F)
Customer (A)
Credit
Manager
(K)
Deposit (E)
Bank (J)

15. DATA FLOW DIAGRAMS Data flows should always be labeled.
The exception is a data flow moving into or out of a data store.
Accounts
Receivable (H)
(G)
Customer
Payment (B)
Remittance
Data (D)
Receivables
Information (I)
1.0
Process
Payment
(C)
2.0
Update
A/R
(F)
Customer (A)
Credit
Manager
(K)
Deposit (E)
Bank (J)

16. DATA FLOW DIAGRAMS
If a data flow is two-way, use a bi- directional arrow.
Update
Receiv-
ables
General
Ledger

17. DATA FLOW DIAGRAMS
If two data elements flow together, then the use of one data flow line is appropriate.
Process
Payment
Customer
Cash Rec’d & Remittance Slip

18. DATA FLOW DIAGRAMS
If the data elements do not always flow together, then multiple lines will be needed.
Process
Payment
Customer
Customer Inquiry
Customer Payment

19. DATA FLOW DIAGRAMS The transformation processes are shown in red.
Every process must have at least one data inflow and at least one data outflow. Why?
Accounts
Receivable (H)
(G)
Customer
Payment (B)
Remittance
Data (D)
Receivables
Information (I)
1.0
Process
Payment
(C)
2.0
Update
A/R
(F)
Customer (A)
Credit
Manager
(K)
Deposit (E)
Bank (J)

20. DATA FLOW DIAGRAMS The data store is shown in red.
Notice that the inflows and outflows to the data store are not labeled.
Accounts
Receivable (H)
(G)
Customer
Payment (B)
Remittance
Data (D)
Receivables
Information (I)
1.0
Process
Payment
(C)
2.0
Update
A/R
(F)
Customer (A)
Credit
Manager
(K)
Deposit (E)
Bank (J)

21. 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
One Process, no data stores

22. DATA FLOW DIAGRAMS Govt. Agencies Depart- ments Tax report & payment
Time cards
Payroll
Processing
System
Employees
Employee checks
Payroll check
New employee form
Bank
Employee change form
Human
Resources
Payroll report
Manage-
ment
This is the context diagram for the S&S payroll processing system (Figure 3-5 in your textbook).

24. DATA FLOW DIAGRAMS
Depart-
ments
Employees
Employee
paychecks
Human
Resources
New employee
form
Time
cards
1.0
Update
Empl.
Payroll
file
2.0
Pay
Employ-
ees
Employee
Change
form
Payroll
check
Bank
This diagram shows the next level of detail for the context diagram in Figure 3-5.
Payroll
Disburse-
ment data
3.0
Prepare
reports
5.0
Update
Gen.
Ledger
Employee/
Payroll file
Payroll tax
disb. voucher
Payroll
report
4.0
Pay
taxes
General
Ledger
Notice that each process in the DFD is numbered sequentially.
Manage-
ment
Tax report
& payment
Govt.
Agencies

25. DATA FLOW DIAGRAMS 2.0 Pay Employ- ees
Depart-
ments
Employees
Employee
paychecks
Human
Resources
New employee
form
Time
cards
1.0
Update
Empl.
Payroll
File
2.0
Pay
Employ-
ees
Employee
change
form
Payroll
check
Bank
Suppose we exploded Process 2.0 (Pay Employees) in the next level. The sub-processes would be numbered 2.1, 2.2, 2.3, etc.
Payroll
Disburse-
ment data
3.0
Prepare
Reports
5.0
Update
Gen.
Ledger
Employee/
Payroll File
Payroll tax
disb. voucher
Payroll
report
4.0
Pay
Taxes
General
Ledger
Manage-
ment
Tax report
& payment
Govt.
Agencies

27. DATA FLOW DIAGRAMS
The data flow diagram focuses on the logical flow of data.
Flowcharts place greater emphasis on physical details.

28. 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.

29. FLOWCHARTS
Flowcharts use a set of standard symbols to depict processing procedures and the flow of data through a system
Using a pictorial representation is often easier to understand and explain versus a detailed narrative.

30. Flowchart Symbol Categories
Input/Output
Processing
Storage
Miscellaneous

31. Flow Chart Symbol Categories
(cont’d) A
Some will use horizontal line in file symbol to indicate permanent storage

32. 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

33. DOCUMENT FLOWCHARTS
A document flowchart shows the flow of documents and data among areas of responsibility in an organization.
These flowcharts trace a document from cradle to grave 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

34. 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

35. Document Flowchart

36. Document Flowchart (cont’d)

37. Guidelines for Drawing Flowcharts
Understand the system you are trying to represent.
Identify entity to be flowcharted, (e.g., dept., function
Identify business processes, documents, data flows, and data processing procedures.
Organize the flowchart so as it reads from top to bottom and left to right.
Name elements descriptively.
Edit/Review/Refine to make it easy to read and understand.

38. GUIDELINES FOR PREPARING FLOWCHARTS
Use separate columns for the activity of each entity.
Example: If there are three different departments or functions that “do” things in the narrative, there would be three columns on the flowchart.

39. What are the entities in this flowchart?

40. GUIDELINES FOR PREPARING FLOWCHARTS
Flowchart the normal course of operations, and identify exceptions with annotations.
Use standard flowcharting symbols, and draw with a template or computer.
Clearly label all symbols. Use annotations if necessary to provide adequate explanation.

41. GUIDELINES FOR PREPARING FLOWCHARTS
Give the flowchart a clear beginning and ending.
Show where each document originated and its final disposition.

42. Identifies where input is coming from

43. Inputs

44. Process

45. Output to
storage

46. Input for
next
process

47. Process

48. Output

49. GUIDELINES FOR PREPARING FLOWCHARTS
Every manual/computer process should have at least one input and at least one output.
Show all data entered into or retrieved from a computer file as passing through a process first.
Do not show process symbols for:
Forwarding a document to another entity
Filing a document

50. Forwarding
a document

51. Filing
a document

52. GUIDELINES FOR PREPARING FLOWCHARTS
Do not connect two documents except when forwarding to another column.
When a document is forwarded, show it in both locations.

53. Show forwarded document in both locations

54. GUIDELINES FOR PREPARING FLOWCHARTS
When using multiple copies of a document, place document numbers in the upper, right-hand corner.

55. What happens to the document numbers as the documents move to other locations?

56. GUIDELINES FOR PREPARING FLOWCHARTS
Show on-page connectors and label them clearly to avoid excess flow lines.

58. GUIDELINES FOR PREPARING FLOWCHARTS
Use off-page connectors if the flow goes to another page.

59. off-page connectors on this flowchart?

60. Document Flowchart (cont’d)

61. SYSTEM FLOWCHARTS
A system flowchart depicts the relationship among the inputs, processes, and outputs of an AIS.
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.

62. System Flowchart

63. Another Example System Flowchart

64. 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.

66. Note that the program flowchart details the logic of processes performed by the computer.

67. This flowchart becomes the programmer’s blueprint for writing the actual computer program.

68. systems flowchart
program flowchart

69. 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
Like DFD’s depicts what happens, but now how
i.e., what technology

70. Business Process Diagram Basic Symbols

71. Payroll Business Process Diagram Example
Note that a major difference between the data flow diagrams and flowcharts compared to the business process diagram is that the business process diagram can distinguish the department or location that the activity takes place. These rows—such as New Employee, Human Resources, Payroll, and so on—in the above figure are called swim lanes.