1 of 64 C © 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e...

1 of 64

C

© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart

HAPTER 3

System Development and Documentation Techniques

2 of 68© 2006 Prentice Hall Business Publishing Accounting Information Systems, 10/e Romney/Steinbart

INTRODUCTION

• Questions to be addressed in this chapter include:– What is the purpose of documentation?– Why do accountants need to understand

documentation?– What documentation techniques are used in

accounting systems?– What are data flow diagrams and flowcharts?

• How are they alike and different?• How are they prepared?


INTRODUCTION

• 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


INTRODUCTION

• In this chapter, we discuss two of the most common documentation tools:– Data flow diagrams

• Graphical descriptions of the sources and destinations of data. They show:– Where data comes from

– How it flows

– The processes performed on it

– Where it goes


INTRODUCTION

• In this chapter, we discuss two of the most common documentation tools:– Data flow diagrams– Flowcharts

• Include three types:– Document flowcharts describe the flow of documents and

information between departments or units.

– System flowcharts describe the relationship between inputs, processing, and outputs for a system.

– Program flowcharts describe the sequence of logical operations performed in a computer program.


INTRODUCTION

• Which method should you use—flowcharts or DFDs?– 62.5% of IS professionals use DFDs.– 97.6% use flowcharts.– Both can be prepared relatively simply using

available software.– Both are tested on professional exams.– CONCLUSION: You need to know them both.


DATA FLOW DIAGRAMS

• A data flow diagram (DFD) graphically describes the flow of data within an organization. It is used to:– Document existing systems– Plan and design new systems

• An ERD is a data model, and a DFD is a process model


DATA FLOW DIAGRAMS

• A data flow diagram consists of four basic elements:– Data sources and destinations. Also called

external entities– Data flows– Processes– Data stores


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


Tue 12-10 (1) DATA FLOW DIAGRAMS

Customer1.0

ProcessPayment

2.0Update

A/R

CreditManager

Bank

AccountsReceivable

Customerpayment

Remittancedata

ReceivablesInformation

Deposit

• Data sources and destinations are marked in red.

• Can you tell which are sources and which are destinations?


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

• If two data elements flow together, then the use of one data flow line is appropriate.

CustomerProcessPayment

Cash Rec’t & Remittance Slip


DATA FLOW DIAGRAMS

• If the data elements do not always flow together, then multiple lines will be needed.

CustomerProcessPayment

Customer Inquiry

Customer Payment


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 the word “and” in the process name


DATA FLOW DIAGRAMS

Customer1.0

ProcessPayment

2.0Update

A/R

CreditManager

Bank

AccountsReceivable

Customerpayment

Remittancedata

ReceivablesInformation

Deposit

• The processes are shown in red.

• Every process must have at least one data inflow and at least one data outflow.


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.


Thu 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

PayrollProcessing

System

Depart-ments

HumanResources

Govt.Agencies

Employees

Bank

Manage-ment

Time cards

New employee form

Employee change form

Tax report &

payment

Employee checks

Payroll checkPayroll report

• This is the context diagram for the S&S payroll processing system (Figure 3-5 in your textbook).

0


Mon 11-10 (2) 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

1.0Updateempl.

Payrollfile

2.0Pay

Employ-ees

5.0Update

Gen.Ledger

4.0Pay

taxes

3.0Preparereports

Employee/Payroll file

GeneralLedger

HumanResources

Depart-ments Employees

Bank

Govt.Agencies

Manage-ment

EmployeeChange

form

New employeeform

Timecards

Employeechecks

Payrollcheck

PayrollDisburse-ment data

Payroll taxdisb. voucher

Tax report& payment

Payrollreport

This diagram shows the next level of detail for the context diagram in Figure 3-5.


DATA FLOW DIAGRAMS

1.0Updateempl.

Payrollfile

2.0Pay

Employ-ees

5.0Update

Gen.Ledger

4.0Pay

taxes

3.0Preparereports


GeneralLedger

HumanResources


Bank

Govt.Agencies

Manage-ment

EmployeeChange

form

New employeeform

Timecards

Employeepaychecks

Payrollcheck



Tax report& payment

Payrollreport

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.


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.


Extra HWCONTEXT DIAGRAM

CUSTOMER

Food Ordering

System

0

Management Report

KITCHEN

RESTAURANTMANAGER

Food OrderCustomer Order

Receipt


LEVEL 0 DIAGRAM

CUSTOMER

TransformCustomer

Food Order

1.0

Management Report

KITCHEN

RESTAURANTMANAGER


Receipt

UpdateInventoryUpdate

Goods Sold

2.03.0

INVENTORYD2GOODS SOLD

D1

GoodsSold Data

Inventory Data

Formatted Goods Sold Data

Formatted Inventory Data

Daily InventoryDepletion AmountsDaily Goods

Sold AmountsProduce

ManagementReport

4.0


DFD Balance

CUSTOMER

Transform Customer

Food Order

1.0

Management Report

KITCHEN

RESTAURANTMANAGER


Receipt

UpdateInventoryUpdate

Goods Sold

2.03.0

INVENTORYD2GOODS SOLD

D1

GoodsSold Data

Inventory Data

Formatted Goods Sold Data

Formatted Inventory Data

Daily InventoryDepletion AmountsDaily Goods

Sold AmountsProduce

ManagementReport

4.0


Level 1 Diagram

ProcessCustomer

Order

1.1

Customer Order

PROCESS 1 ON THE LEVEL 0 DIAGRAM

SUB PROCESS 1 THIS LEVEL 1DIAGRAM

TransformOrder to KitchenFormat

1.3

Customer Order Food Order

GenerateCustomer

Receipt

1.2

Customer Order

Generate Inventory

Decrements

Customer Order

Customer Order

1.5

1.4

Generate Good SoldIncrements

InventoryData

Goods Sold Data

ReceiptNOTE HOW WE HAVE THE SAME INPUTS AND OUTPUTS AS THE ORIGINAL PROCESSSHOWN IN THE LEVEL 0 DIAGRAM


Another Level 1 Diagram

Management Report

Daily InventoryDepletion Amounts

Daily GoodsSold Amounts

ProduceManagement

Report

4.0

4.1Access

Goods Soldand Inventory

Data

Daily GoodsSold Amounts

Daily InventoryDepletion Amounts

Inventory Data

Goods Sold Data

4.2AggregateGoods Sold

and InventoryData

PrepareManagement

Report

4.3 Management Report

ORGINAL LEVEL 0 PROCESS

LEVEL 1 PROCESSES

PROCESSES 2.0 AND 3.0 ON THE LEVEL 0 DIAGRAMDO NOT NEED FURTHER DECOMPOSTION


Mon 13-10 DATA FLOW DIAGRAMS

• Let’s step through some guidelines on how to create a DFD.

• RULE 1: Understand the system. Observe the flow of information and interview people involved to gain that understanding.

• RULE 2: Ignore control processes and control actions (e.g., error corrections). Only very critical error paths should be included.

• RULE 3: Determine the system boundaries—where it starts and stops. If you’re not sure about a process, include it for the time being.


Tue 8-3 DATA FLOW DIAGRAMS

• RULE 4: Draw the context diagram first, and then draw successively greater levels of detail.

• RULE 5: Identify and label all data flows. • RULE 6: Data flows that always flow together

should be grouped together. Those that do not flow together should be shown on separate lines.

• RULE 7: Show a process (circle) wherever a data flow is converted from one form to another. Likewise, every process should have at least one incoming data flow and at least one outgoing data flow.


DATA FLOW DIAGRAMS

• RULE 8: Processes that are logically related or occur simultaneously can be grouped in one process.

• RULE 9: Number each process sequentially. A process labeled 5.0 would be exploded at the next level into processes numbered 5.1, 5.2, etc. A process labeled 5.2 would be exploded into 5.2.1, 5.2.2, etc.

• RULE 10: Process names should include action verbs, such as update, prepare, etc.


DATA FLOW DIAGRAMS

• RULE 11: Identify and label all data stores.• RULE 12: Identify and label all sources and

destinations. An entity can be both a source and destination. You may wish to include such items twice on the diagram, if needed, to avoid excessive or crossing lines.

• RULE 13: As much as possible, organize the flow from top to bottom and left to right.


DATA FLOW DIAGRAMS

• RULE 14: You’re not likely to get it beautiful the first time, so plan to go through several iterations of refinements.

• RULE 15: On the final copy, lines should not cross. On each page, include:– The name of the DFD– The date prepared– The preparer’s name


DATA FLOW DIAGRAMS

• The first paragraph of the narrative for the payroll process reads as follows:– When employees are hired, they complete a new employee

form. When a change to an employee’s payroll status occurs, such as a raise or a change in the number of exemptions, human resources completes an employee change form. A copy of these forms is sent to payroll. These forms are used to create or update the records in the employee/payroll file and are then stored in the file.


DATA FLOW DIAGRAMS

1.0Updateempl.

Payrollfile

2.0Pay

Employ-ees

5.0Update

Gen.Ledger

4.0Pay

taxes

3.0Preparereports


GeneralLedger

HumanResources


Bank

Govt.Agencies

Manage-ment

EmployeeChange

form

New employeeform

Timecards

Employeepaychecks

Payrollcheck



Tax report& payment

Payrollreport


DATA FLOW DIAGRAMS

• The data flow diagram focuses on the logical flow of data.

• Next, we will discuss flowcharts, which place greater emphasis on physical details.


Mon 18-10 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 and Power Point are also used– The software uses pre-drawn shapes, and the

developer drags the shapes into the drawing.


Thu 10-3 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 Analysis process.


Flowcharting Symbols: Some Input Output Symbols

Document

Online keying(Manual input from keyboard)

Display

Input/output; Journal/ledger (Data)

Symbol Name


Flowchart Symbols:Some Processing Symbols

Manual operations

Computer processing

Auxiliary operation (optical character scanner)

Symbol Name


Flowchart Symbols: Some Storage Symbols

Magnetic disk (permanent)

Magnetic tape

Symbol Name

On-line Temporary Storage

(General Data storage)(Stored data, moving data from one location to another)


Flowchart Symbols: Some Flow and Miscellaneous Symbols

On-page connector

Off-page connector

Terminal (Start, stop, begin, end)

Decision

Document or processing flowSymbol Name


Document Flowchart Symbols

Document Off-line FileMultiple-partdocument

ManualProcess

Journal/Ledger

Terminal

Off-pageConnector

On-pageConnector

A

Annotation


This is part of the document flowchart from Figure 3-9 in your textbook.


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


– 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.).

Tue 26-10 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.

– 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.

– 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



Forwardinga document


Filinga document


– 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.



– If a flowchart takes more than one page, label the pages as 1 of 5, 2 of 5, 3 of 5, etc.

– Show documents or reports first in the column where they are created.

– Start with a rough draft; then redesign to avoid clutter and crossed lines.

– Verify the accuracy of your flowchart by reviewing it with users, etc.

– Place the flowchart name, the date, and the preparer’s name on each page of the final copy.



Sun 13-3 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.


Additional Flowcharting Symbols for System Flowcharts

AutomatedProcess

AuxiliaryOperation

VideoDisplay

On-lineKeyboard

KeyingOperation

MagneticTape

MagneticDisk

On-LineStorage

Diskette


• System Flowchart Shown in Figure 3-11 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.


FLOWCHARTS VS. DFDs

• Now that we’ve examined both flowcharts and DFDs, it may be useful to discuss the differences again.

• DFDs place a heavy emphasis on the logical aspects of a system.

• Flowcharts place more emphasis on the physical characteristics of the system.


Mon 15- 3 FLOWCHARTS VS. DFDs

• EXAMPLE: The registrar’s office of a small college receives paper enrollment forms from students. They sort these records alphabetically and then update the student record file to show the new classes. They also prepare class lists from the same data. The sorted enrollment forms are forwarded to the bursar’s office for billing purposes. Class lists are mailed to faculty members.


Students

1.0UpdateStudentRecords

2.0Prepare

Class Lists

StudentRecords

Faculty

Bursar

EnrollmentForms

EnrollmentForms

EnrollmentForms

ClassLists

Here’s a DFD that goes with the story.


Students


2.0Prepare

Class Lists

StudentRecords

Faculty

Bursar

EnrollmentForms

EnrollmentForms

EnrollmentForms

ClassLists

Students

Registrar’s Office

EnrollmentForms

SortForms

SortedEnrollment

Forms

UpdateStudentRecords

A

PrepareClassLists

SortedEnrollment

Forms

ClassLists

SortedEnrollment

Forms

BursarFaculty

Here’s a flowchart that goes with the story


Mon 25-10 FLOWCHARTS VS. DFDs

• Now let’s change the story so that students enter enrollment data online. The registrar’s office sends a tape file of the enrollment data to the bursar’s office and continues to send paper class lists to faculty.


Students


2.0Prepare

Class Lists

StudentRecords

Faculty

Bursar

EnrollmentData

EnrollmentData

EnrollmentData

ClassLists

Original DFD

Students


2.0Prepare

Class Lists

StudentRecords

Faculty

Bursar

EnrollmentForms

EnrollmentForms

EnrollmentForms

ClassLists

Here’s the revised DFD.


Here’s the revised flowchart.


Students

ClassLists

Bursar

Faculty

EnrollmentData


StudentRecords

EnrollmentData

PrepareClassLists

Students


EnrollmentForms

SortForms

SortedEnrollment

Forms


A

PrepareClassLists

SortedEnrollment

Forms

ClassLists

SortedEnrollment

Forms

BursarFaculty

Original Flowchart


FLOWCHARTS VS. DFDs

• Moral of the Story: Changes in the physical characteristics of the process do affect the flowchart but have little or no impact on the DFD.

• The DFD focuses more on the logic.

• When deciding which tool to employ, consider the information needs of those who will view it.

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