Chapter 3: System Documentation Techniques

CHAPTER 3 : SYSTEM
DOCUMENTATION TECHNIQUES
Point Materials :
- Introduction
- Data Flow Diagrams
~ Subdividing the DFD
- Flowcharts
~ Types of Flowcharts
~ Program Flowcharts
- Business Process Diagrams
Introduction
Documentation explains how a system works, including the who, what, when, where,
why, and how of data entry, data processing, data storage, information output, and
system controls. Popular means of documenting a system include diagrams,
flowcharts, tables, and other graphical representation of data and information. These
are supplemented by a narrative description of the system, a written step-by-step
explanation of system components and interactions. In this chapter, we explain three
common system documentation tools: data flow diagrams, flowcharts, and business
process diagrams.
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 as well as to determine if a proposed
system meets the company’s needs.
More skill is needed to prepare documentations that shows how an exiting or
proposed system operates.
This chapter discusses the following documentation tools:
1. Data flow diagram (DFD), a graphical description of data sources, data
flows, transformation process, data storage, and data destinations.
2. Flowchart, which is a graphical description of a system. There are several
types of flow charts, including:
a. Document flowchart, which shows the flow of documents and information
between departments or areas of responsibility
b. System flowchart, which shows the relationship among the input,
processing, and output in an information system.
c. Program flowchart, which shows the sequence of logical operations a
computer performs as it executes a program.
3. Business Process diagrams, which are graphical descriptions of the
business processes used by a company.
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 models or flowcharts to document a system, because such graphic
portrayals more readily reveal internal control weaknesses and strengths.
The Sarbanes-Oxley Act (SOX) of 2002 requires an internal report in public
company annual reports that (1) states that management is responsible for
establishing and maintaining an adequate internal control structure and (2) assesses
the effectiveness of the company’s internal controls. SOX also specifies that a
company’s auditor must evaluate management’s assessment of the company’s
internal control structures and attest to its accuracy. The auditor’s attestation should
include a specific notation about significant defects or material noncompliance found
during internal control tests. This means that both the company and its auditors have
to document and test the company’s internal controls. To do so, they must be able to
prepare, evaluate, and read different types of documentation, such as business
process models and flowcharts.
Documentation tools are also used extensively in the systems development
process. In addition, the team members who develop information system
applications often change, and documentation tools help the new team members get
up to speed quickly.
Documentation is easier to prepare and revise when a software package is
used. Once a few basic commands are mastered, users can quickly and easily
prepare, store, revise, and print presentation-quality documentation.
The documentation tools in this chapter are used throughout the book.
Data Flow Diagrams
A data flow diagrams (DFD) graphically describes the flow of data within an
organization. It uses the first four symbols shown in Figure 3-1

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CHAPTER 3 : SYSTEM

Accountants use documentation techniques extensively. Auditing standards

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