Systems Documentation Techniques

Copyright © 2015 Pearson Education, Inc.

Systems Documentation TechniquesChapter 3

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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 (e.g., auditors need to assess risk).

▫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


Why Document Systems?

•Sarbanes-Oxley Act (SOX) requires management to assess internal controls and auditors to evaluate the assessment

•SAS-94 requires that auditors understand the automated and manual procedures an entity uses.▫This understanding can be gleaned through

documenting the internal control system—a process that effectively exposes strengths and weaknesses of the system.

•Used for systems development and changes3-4


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.


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 (DFD)

Focuses on the data flows for:•Processes•Sources and destinations of the data (also

called external entities)•Data stores

DFD are visually simple, can be used to represent the same process at a high abstract or detailed level.

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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


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•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 two verbs 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.


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


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.


CONTEXT 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


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.

Systems Documentation Techniques

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