Documenting Accounting Information Systems Chapter 5

Chapter 5: Documenting Accounting Information Systems Introduction Why Documentation Is Important Primary Documentation Methods Other Documentation Tools End-user Computing And Documentation 2

Why Documentation Is Important 1. Depicting how the system works 2. Training users 3. Designing new systems 4. Controlling system development and maintenance costs 5. Standardizing communications with others 4

Why Documentation Is Important 6. Auditing AISs 7. Documenting business processes 8. Complying with the Sarbanes-Oxley Act 9. Establishing accountability 4

Example Flowchart 4

Primary Documentation Methods Data Flow Diagrams Document Flowcharts System Flowcharts Process Maps

Data Flow Diagrams Uses Used in systems development process Tool for analyzing an existing system Types Context Physical Logical 16

Data Flow Diagram Symbols 16

Types of DFDs Context Diagrams Overview of the system High-level Physical Data Flow Diagrams Focuses on the physical entities of organization Logical Data Flow Diagrams Emphasizes tasks of participants 17

Context Diagram 18

Physical Data Flow Diagrams Focus on physical entities, tangible documents, and reports flowing through the system List job titles of employees Simple, more readable, and easier to interpret 22

Physical Data Flow Diagrams 22

Logical Data Flow Diagrams Identifies what participants do Bubble indicates a task the system performs Help designers decide: System resources to acquire Activities employees must perform How to protect and control these systems 23

Logical Data Flow Diagrams 23

Decomposition Exploding data flow diagrams to create more detail Level 0 data flow diagrams Exploded into successive levels of detail (3.0 – Process Paycheck) Level 1 data flow diagrams 3.1 – Compute gross pay 3.2 – Compute payroll deductions 24

Decomposition – Exploded View of “Process Paycheck” (3.0) 24

Guidelines for Drawing DFDs Avoid detail in high level DFDs Approximately five to seven processes in each Logical DFD Different data flows should have different names All data stores have data flows into and out of them, unless they are used for archiving Include temporary files 25

Guidelines for Drawing DFDs Final recipients of system information are external entities Personnel or departments processing data of the current system are internal entities Display only normal processing routines in high-level DFDs Use only one entity to represent several system entities that perform the same task 26

Document Flowcharts Traces the physical flow of documents through an organization Used to analyze systems for weaknesses in controls and reports Begins by identifying departments and groups that handle the documents

Common Document Flowcharting Symbols 7

A Simple Document Flowchart 9

A Document Flowchart 9

Guidelines for Drawing Document Flowcharts Identify all departments involved Classify documents and activities by department Identify documents by numbers or color Account for the distribution of each copy of a document. 12

Document Flowcharting Guidelines Use on-page and off-page connectors Coordinate connectors by letter or number Annotate unclear activities Identify filing sequence when necessary Avoid acronyms that could cause confusion Consider automated flowchart tools 12

Study Break #1 The diagram here is most likely a: Document flowchart System flowchart Data flow diagram Program flowchart

Study Break #2 In the diagram, the arrow represents: A wireless transmission A telephone call An information flow A management order to a subordinate

System Flowcharts Utilize standardized symbols Concentrate on the computerized data flows Depict electronic job stream of data Illustrate an audit trail through AIS 10

Common System Flowchart Symbols

Common System Flowchart Symbols

System Flowchart - Payroll Processing 11

System Flowcharting Guidelines Arrange to read from top to bottom and left to right Use standardized symbols There must be a process symbol separating an input and output symbol (Sandwich rule) 12

Systems Flowcharting Guidelines Use on-page and off-page connectors Sketch a flowchart before designing the final draft Use annotated descriptions and comments in flowcharts for clarification 13

System Flowchart Example

System Flowchart Example (continued)

Study Break #3 Which of the following is not true about system flowcharts? They can depict the flow of information in a computerized AIS They use standardized symbols They cannot show how documents flow in an AIS They often document an audit trail

Study Break #4 The sandwich rule states that: You should only create logic diagrams that have some “meat” in them Every diagram should have a cover page and a summary page A processing symbol should be between an input and an output symbol In DFDs, there should always be data flow lines leading to and from files

Process Maps Document business processes in easy-to-follow diagrams. Auditing uses: Understand operations Document understanding Identify internal control weaknesses and problems 15

Process Map - Order Fulfillment Process 16

A Second-level Process Map 16

Guidelines for Drawing Process Maps Identify and define the process of interest Understand the purpose for the process map Meet with employees to acquire input Remember that processes have inputs, outputs, and enablers 16

Guidelines for Drawing Process Maps Show key decision points Pay attention to the level of detail you capture Avoid mapping the “should-be” or “could-be” (Map what is in place!) Practice, practice, practice 16

Program Flowcharts Outline the processing logic for computer programs Indicate the order of processing steps Structured Walk-Through Formal review of logic Assess the soundness of the logic Detect and correct design flaws Make improvements Macro Program Flowchart provides an overview of the data processing logic

Program Flowchart 29

Decision Tables Table of conditions and processing tasks Indicate what action to take for each possibility Used when computer program involves many conditions and subsequent courses of action Used as an alternative to program flowcharts or in addition to the flowcharts 30

Decision Tables 30

Drawbacks of Decision Tables Do not show order in which a program tests data conditions or takes processing actions Require documentation understanding beyond flowcharting Requires extra work to prepare and the work may not be cost-effective 30

Study Break #5 Which of the following is not true about process maps? They depict the flow of information in computerized AISs They use standardized symbols Government agencies as well as businesses often use them Web pages often depict hierarchical versions of them

Study Break #6 A decision table shows: The possible conditions and processing alternatives for a given situation Who sat where at a board meeting The rules for drawing DFDs The local outsourcing vendors in the area for documentation tasks

Software Tools for Graphical Documentation and SOX Compliance Microsoft Word, Excel, and PowerPoint CASE Tools SOX and AS5 Compliance 30

CASE Tools Computer-Assisted Software Engineering Automate documentation tasks Examples include: iGrafx allCLEAR SmartDraw Visio Rapid Application Development (RAD) 31

CASE Tool--ExceleratorTM 30

SOX and AS5 Compliance Emphasis on entity-level controls Compliance software packages Symantec Control Compliance Suite OpenPages FCM BizRights 31

End-User Computing and Documentation Non-IT employees create their own computer applications Important of documentation: Require training manuals and reference guides Identify how to accomplish and undo actions Greater efficiency when altering system 33

Documentation Information 33

Policies for End-User Computing and Documentation Formally evaluate large projects Adopt formal end-user development policies Formalize documentation standards Limit the number of employees authorized to create end-user applications Audit new and existing systems 34