Chapter 3

Systems Documentation Techniques

Objective 1: Explain what Documentation Techniques Are, Its importance, and Uses by Accountants:

What Documentation Techniques Are?

Documentation explains how a system works.
Popular means of documenting a system include:
1-Diagrams such as (data flow diagrams, and business process diagrams)
2-Flowcharts, and
3- Other graphical representations of data and information.
These are supplemented by a narrative description of the system,
Narrative description a written step-by-step explanation of system components and interactions
Importance of Documentation Techniques (Tools):

Documentation tools are important on the following levels:

1. At a minimum, you must be able to read documentation to determine how a system works.
2. You may need to evaluate documentation to:
Identify internal control strengths and weaknesses and recommend improvements.
Determine if a proposed system meets the company’s needs.
3. More skill is needed to prepare documentation that shows how an existing or proposed system
operates.

Uses of Documentation Techniques

Accountants use documentation techniques extensively.

Auditing standards require that independent auditors understand the automated and manual internal
control procedures an entity uses.
One good way to gain this understanding is to use:
* Business process diagrams (BPD) or flowcharts to document a system because, such graphic portrayals
more readily reveal internal control weaknesses and strengths.
The Sarbanes-Oxley Act (SOX) specifies that a company’s auditor must evaluate management’s
assessment of the company’s internal control structures and attest to its accuracy.
Documentation tools are also used extensively in the systems development process.
In addition, the team members who develop information systems applications often change, and
documentation tools help the new team members get up to speed quickly.
Note that: Documentation is easier to prepare and revise when a software package is used.

Objective 2: Prepare and use data flow diagrams to understand, evaluate, and document information
systems

Some of the main types of documentation techniques are:

1-Data flow diagrams (DFD),
2- Flowcharts, and
3- Business process diagrams (BPDs).

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 Data Flow Diagrams:
1- Data flow diagram concept:
A data flow diagram (DFD) is a graphical description of data sources, data flows, transformation
processes, data storage, and data destinations.
In other words a data flow diagram graphically describes the flow of data within an organization. It uses
the four symbols shown in Figure 3-1, to represent its four basic elements.

Data flow diagram symbols:

The Basic elements of a data flow diagram (DFD):

A data flow diagram consists of four basic elements:

A. Data sources and destinations:
A data source and a data destination are entities that send or receive data that the system uses or produces.
They are represented by squares.
Note: An entity can be both a source and a destination.

B. Data Flow:
A Data that pass between data stores and a source or destination must go through a data transformation
process.
Data flow is the movement of data among processes, data stores, sources and destinations
Data flows are labeled to show what information is flowing. The only exception is data flow between a
process and a data store because the data flow is usually obvious.
Data flow is represented by an arrow.
Notes:
1. If two or more data flows move together, a single line is used. For example, a data flow (customer
payment) consists of a payment and remittance data.

2. If the data flow separately, two lines are used. For example, we can use two lines to represent
customer inquiries and customer payment because customer inquiries do not always accompany a
payment.

C. Transformation processes:
Processes represent the transformation of data into information.
Processes are represented by circles.
For example, figure 3-3, shows that process payment splits the customer payment into the remittance
data, and the check, which is deposited in the bank.

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 The update receivables process uses remittance and accounts receivable data to update receivable records
and send receivables information to the credit manager.

D. Data stores:
A data store is a repository of data.
A data store is represented by two horizontal lines.
Note: DFDs do not show the physical storage medium (such as a server or paper).

Subdividing the DFDs:

DFDs are subdivided into successively:

1. The lower level DFD provides ever-increasing amounts of detail because:

Few systems can be fully diagrammed on one sheet or paper
Users have differing needs, and a variety of levels can better satisfy differing requirements.

2. The highest- levels DFDs:

The highest level DFD is referred to as a context diagram because it:
Provides the reader with a summary-level view of a system.
Depicts a data processing system and the entities that are the sources and destinations of system inputs
and outputs.

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Objective 3: Prepare and Use Flowcharts to Understand, Evaluate, and Document Information Systems.

Flowchart Concept:
A flowchart is a pictorial, analytical technique used to describe some aspect of an information system in
a clear, concise, and logical manner.
Flowcharts record: How business processes are performed, and how documents flow through the
organization.
Flowcharts are also used to analyze how to improve business processes and document flows.
Most flowcharts are drawn using a software program.
Flowchart Symbols:
Flowcharts use a standard set of symbols to:
Describe pictorially the transaction processing procedures a company uses, and
Describe the flow of data through a system.
As shown in Figure 3-8, flowcharting symbols are divided into four categories.
1. Input/ Output Symbols:
They show input to or output from a system.

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2. Processing Symbols:
They show data processing, either electronically or by hand.

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3. Storage Symbols:
They show where data is stored.

4. Flow and Miscellaneous Symbols:

They indicate:
*The flow of data,
*Where flowcharts begin or end,
*Where decisions are made, and
*How to add explanatory notes to flowcharts.

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Types of Flowcharts:

Flowcharts include the following types:

1. Document flowcharts
2. System flowcharts
3. Program flowcharts

1) Document Flowcharts:
Document flowchart Concept:
A document flowchart illustrates the flow of documents and data among areas of responsibility within an
organization.
They trace a document from its cradle to its grave, showing:
Where each document originates, its distribution, its purpose, its disposition, and
Everything that happens as it flows through the system.
Uses of document flowcharts:
A special type of flowchart, called an internal control flowchart is used to describe, analyze, and evaluate
internal controls.
They are used to identify 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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2) System Flowcharts:
System flowchart Concept:
A system flowchart depicts the relationships among system input, processing, storage, and output.
Uses of system flowcharts
System flowcharts are used to:
-Describe data flows and procedures within AIS.
-Provide an overview of how each business process works.
3) Program flowcharts:
A program flowchart:
*illustrates the sequence of logical operations performed by a computer in executing a program.
*describes the specific logic used to perform a process shown on a system flowchart.

Business Process Diagrams:

A business process diagram (BPDs) is a visual way to describe the different steps or activities in a
business process.
For example, there are many activities in the revenue cycle. Among them are:
* receiving an order,
* checking customer credit,
* verifying inventory availability, and
* confirming customer order acceptance.
All of these activities can be shown on a BPD to give the reader an easily understood pictorial view of
what takes place in a business process.
- While BPDs can describe interactions within an entity as well as between entities, the BPDs in the
textbook do not document the activities performed by external parties.
- Thus, a DPD for the revenue cycle will only describe the function performed by the selling company.

Preparing System Flowcharts

Case 1:
Draw a system flowchart to illustrate the process of updating accounts payable master file by credit
purchasing transactions.
The system includes the following steps:
1. On a daily base the credit purchase transactions are collected and entered into the computer using a
keyboard.

2. The computer edits and stores (saves) purchase transaction data on a magnetic tape (Purchase
transaction file).

3. The computer sorts purchase transactions by supplier number.

4. At the end of each day, the accounts payable master file is updated using purchase transaction file. Two
printed outputs from this process are:
a) A report listing erroneous transactions.
b) A past-due supplier balances report.

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Case 2:
Draw a system flowchart to illustrate the process of updating the inventory master file. The system
includes the following steps:
1. On a daily base the inventory transactions are collected and entered into the computer using a
keyboard.

2. The computer edits and stores (saves) inventory transaction data on a magnetic disk (inventory
transaction file).

3. The computer sorts inventory transactions by inventory item number.

4. The daily sorted inventory transaction file is merged with a weekly inventory transaction file.

5. At the end of each week, the inventory master file is updated using the merged weekly transaction file.
Two printed outputs from this process are:

a) A report listing erroneous transactions.

b) An inventory status report.

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Case 3:
Draw a system flowchart to illustrate the process of updating accounts receivable master file by credit
sales.
The system includes the following steps:
1.On a daily base the credit sales transactions are collected and entered into the computer using a
keyboard.

2.The computer edits and stores (saves) sales transaction data on a magnetic disk (sales transaction file).

3.The computer sorts sales transactions.

4.At the end of each day, the accounts receivable master file is updated using sales transaction file. Two
outputs from this process are:

a) A printed report listing erroneous transactions,

b) A past-due customer balances report displayed on a screen.

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Case 4:

Draw a system flowchart to illustrate the process of updating the inventory master file by weekly sales.
The system includes the following steps:
1.On a daily base the sales transactions are collected and entered into the computer using a keyboard.

2.The computer edits and stores (saves) sales transactions on a magnetic disk (sales transaction file).

3.The computer sorts sales transactions.

4.The daily sorted transaction file is merged with a weekly sales transaction file.

5.At the end of each week, the inventory master file is updated using merged weekly sales transaction
file. Two outputs from this process are:
a) A printed report listing erroneous transactions.
b) An inventory status report displayed on a screen.

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Case 5:

Draw a system flowchart to illustrate the process of updating the payroll master file.
The system includes the following steps:
1.On a monthly base job time tickets are collected and entered into the computer using a keyboard.

2.The computer edits and stores (saves) job time tickets data on a magnetic disk (Job time transaction
file).

3.The computer sorts job time data by job number.

4.At the end of each month, the payroll master file is updated using job time transaction file. Three
outputs from this process are:

a) A printed report listing erroneous transactions.

b) A printed list of employees’ monthly salaries.
c) A salary analyses report by job displayed on a screen.

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Case (1) (System flowchart)
Draw a system flowchart to illustrate the process of updating accounts payable master file by credit
purchasing transactions. The system includes the following steps:
1. On a daily base the credit purchase transactions are collected and entered into the computer using a
keyboard.
2. The computer edits and stores (saves) purchase transaction data on a magnetic tape (purchase
transaction file).
3. The computer sorts purchase transactions by supplier number.
4. At the end of each day, the accounts payable master file is updated using purchase transaction file.
Two printed outputs from this process are
a) A report listing erroneous transactions.
b) Past-due supplier balances report.

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 Solution
1. On a daily base the credit purchase documents are collected and entered into the computer using a
keyboard

2. The computer edits and stores (saves) purchase transaction data on a magnetic tape (purchase
transaction file).

3. The computer sorts purchase transactions by supplier number.

4. At the end of each day, the accounts payable master file is updated using purchase transaction file.
Two printed outputs from this process are
a) a report listing erroneous transactions and
b) past-due supplier balances report.

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Case (2) (system flowchart)
Draw a system flowchart to illustrate the process of updating the inventory master file.
The system includes the following steps:

1. On a daily base the inventory transactions are collected and entered into the computer using a
keyboard.
2. The computer edits and stores (saves) inventory transactions on a magnetic disk (inventory
transaction file).
3. The computer sorts inventory transactions by inventory item number.
4. The daily sorted inventory transactions are merged with a weekly inventory transaction file.
5. At the end of each week, the inventory master file is updated using the merged weekly transaction
file. Two printed outputs from this process are:
a) A report listing erroneous transactions
b) Inventory status report.
Solution
1. On a daily base the inventory transactions are collected and entered into the computer using a
keyboard.

2. The computer edits and stores (saves) inventory transactions on a magnetic disk (inventory
transaction file).

3. The computer sorts inventory transactions by inventory

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 4. The daily sorted inventory transactions are merged with a weekly inventory transaction file.

5. At the end of each week, the inventory master file is updated using the merged weekly transaction
file. Two printed outputs from this process are
a) a report listing erroneous transactions and
b) Inventory status report.

Case 3 (system flowchart):

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Draw a system flowchart to illustrate the process of updating accounts receivable master file by credit sales.
The system includes the following steps:
1. On a daily base the credit sales transactions are collected and entered into the computer using a
keyboard.
2. The computer edits and stores (saves) sales transaction data on a magnetic disk (sales transaction
file).
3. The computer sorts sales transactions.
4. At the end of each day, the accounts receivable master file is updated using sales transaction file.
Two outputs from this process are:
a) A printed report listing erroneous transactions,
b) A past-due customer balances report displayed on a screen.

Solution
1. On a daily base the credit sales transactions are collected and entered into the computer using a
keyboard.

2. The computer edits and stores (saves) sales transaction data on a magnetic disk (sales transaction
file).

3. The computer sorts sales transactions file.

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 4. At the end of each day, the accounts receivable master file is updated using sales transaction file.
Two outputs from this process are:
a) A printed report listing erroneous transactions,
b) A past-due customer balances report displayed on a screen

Case 4 (system flowchart):

Draw a system flowchart to illustrate the process of updating the inventory master file by weekly sales.
The system includes the following steps:

1. On a daily base the sales transactions are collected and entered into the computer using a keyboard.
2. The computer edits and stores (saves) sales transactions on a magnetic disk (sales transaction file).
3. The computer sorts sales transactions.
4. The daily sorted transaction file is merged with a weekly sales transaction file.
5. At the end of each week, the inventory master file is updated using merged weekly sales transaction
file. Two outputs from this process are:
a) A printed report listing erroneous transactions.
b) An inventory status report displayed on a screen.

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 Solution
1. On a daily base the sales transactions are collected and entered into the computer using a keyboard.

2. The computer edits and stores (saves) sales transactions on a magnetic disk (sales transaction file).

3. The computer sorts sales transactions file.

4. The daily sorted transaction file is merged with a weekly sales transaction file.

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 5. At the end of each week, the inventory master file is updated using merged weekly sales transaction
file. Two outputs from this process are:
a) A printed report listing erroneous transactions.
b) An inventory status report displayed on a screen.

Case 5 (system flowchart):

Draw a system flowchart to illustrate the process of updating the payroll master file.
The system includes the following steps:

1. On a monthly base job time tickets are collected and entered into the computer using a keyboard.
2. The computer edits and stores (saves) job time tickets data on a magnetic disk (Job time transaction
file).
3. The computer sorts job time data by job number.
4. At the end of each month, the payroll master file is updated using job time transaction file. Three
outputs from this process are:
a) A printed report listing erroneous transactions.
b) A printed list of employees’ monthly salaries.
c) A salary analyses report by job displayed on a screen.
Solution
1. On a monthly base job time tickets are collected and entered into the computer using a keyboard.

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2. The computer edits and stores (saves) job time tickets data on a magnetic disk (Job time transaction
file).

3. The computer sorts job time data by job number.

4. At the end of each month, the payroll master file is updated using job time transaction file. Three
outputs from this process are:
a) A printed report listing erroneous transactions.
b) A printed list of employees’ monthly salaries.
c) A salary analyses report by job displayed on a screen.

‫حبيبي يا مدلع قلبي من حبك ولع‬

 ‫تيجي نخلع يا حبيبي ونسيب المذاكره تولع‬
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