Systems documentation techniques - Chapter 3

  Chapter 

Documentation encompasses the narratives, flowcharts, diagrams, and other written materials that explain how the system works. This information covers the who, what, when, where, why, and how of data entry, processing, storage, information output, and system controls. Popular means of documenting a system include diagrams, flowcharts, tables, and other graphical representation of information. These are supplemented by a narrative description of the system, a written step by step explanation of the system components and interactions. In this chapter, we explain two common systems documentation tools: data flow diagrams and flowcharts.

Documentation tools are important on the following levels:

  1. At a minimum, you must be able to read documentation to determine how the system works.

  2. You may need to evaluate internal control systems documentation to identify strengths and weaknesses and recommend improvements.

  3. More skill is needed to prepare internal control documentation or documentation that shows how an existing or proposed system operates.

This chapter discusses the following documentation tools:

  • Data flow diagram (DFD). This is a graphical description of data sources, flows, processes, storage and destinations.

  • Document flowchart. This is a graphical description of the flow of documents and information between departments or areas of responsibility.

  • System flowchart. This is a graphical description of the relationship among the input, processing, and output in an information system.

  • Program flowchart. This is a graphical description of the sequence of logical operations a computer performs as it executes a program.

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 flowcharts to documents the internal control system, because such graphic portrayals more readily reveal weaknesses and strengths.

Documentation tools are also used extensively in the system 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.

The documentation tools in this chapter are used throughout the book. They are also tested on professional examinations, and learning about them better prepares you for these examinations.

A data flow diagram (DFD) graphically describes the flow of data within an organization. It uses the symbols to represent the four basic elements: data sources, data flows, transformation process, and data stores.

A data source and data destination are entities that send or receive data that the system uses or produces. An entity can be both a source and a destination. Data sources and destinations are represented by square boxes. Data destinations are also referred to as data sinks.

A data flow is the movement of data among the processes, stores, and destinations. It is the flow of the data into or out of a process represented by curved or straight lines with arrows. Data that pass between data stores and a source or destination must go through a data transformation process. Data flows are labelled to show what information is flowing the only exception is data flow between a process and a data store. If two or more data flows move together, a single line is used.

Processes represent the transformation of data. An transformation process is the process that transform data from inputs to outputs are represented by circles. They are often referred to as bubbles.

A data store is a repository of data. Data flow diagrams do not show the physical storage medium used to store the data. The storage of data is represented by two horizontal lines, with the name of the file written inside the lines.

DFD’s are subdivided into successively lower levels to provide ever-increasing amounts of detail, because few systems can be fully diagrammed on one sheet of paper. The highest level DFD is referred to as a context diagram, because it provides the reader with a summary-level view of a system. It depicts a data processing system and the entities that are the sources and destinations of system inputs and outputs.


There are a few activities and data flows in a payroll process.


Data inputs

Data outputs

Update employee/ payroll file

New employee form

Employee change form

Updated employee/ payroll file

Pay employees

Time cards

Employee/ payroll file

Tax rates table

Employee checks

Payroll register

Updated employee/ payroll file

Payroll check

Payroll cash disbursements voucher

Prepare reports

Employee/ payroll file

Payroll report

Pay taxes

Employee/ payroll file

Tax report

Tax payment

Payroll tax cash disbursements voucher

Updated employee/ payroll file

Update general ledger

Payroll tax cash disbursements voucher

Payroll cash disbursements voucher

Updated general ledger

A flowchart is an analytical technique used to describe some aspect of an information system in a clear, concise, and logical manner. Flowcharts use a standard set of symbols to describe pictorially the transaction processing procedures a company uses and the flow of data through a system.

Flowcharting was introduced by industrial engineers in the 1950s as a way of recording how business processes are performed and documents flow and analysing how to improve processes and document flows.

Flowcharts have significant advantages. A pictorial representation is much easier to understand than a narrative description. Both the auditor and the business owner can use the flowchart as a working tool during discussions. For an experienced flowcharter using a computerized drawing tool, flowcharts provide an easy wat to capture and record data during interviews, and they can be easily and quickly revised.

Flowcharts also do have some disadvantages. Some people do not like or understand them. Many are poorly drawn and therefore not as helpful as they should be. They are time-consuming to prepare if the flowcharter is not trained properly.

Flowcharting symbols are divided into four categories:

  1. Input/output symbols represented devices or media that provide input to or record output from processing operations.

  2. Processing symbols show what types of devices used to process data or indicate when processing is performed manually.

  3. Storage symbols represent the devices used to store data.

  4. Flow and miscellaneous symbols indicate the flow of data, where flowcharts begin or end, where decisions are made, and when to add explanatory notes to flowcharts.

See figure 3.8 page 76 and page 77 for an overview of the common flowcharting symbols.

A document flowchart illustrates the flow of documents and information 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.

A document flowchart is particularly useful in analysing internal control procedures.

Document flowcharts that describe and evaluate internal controls are often referred to as internal control flowcharts. They can reveal system weaknesses or inefficiencies.

System flowcharts depict the relationships among system input, processing and output. A system flowchart begins by identifying system inputs and their origins. The input is followed by the processing performed on the data. The resulting new information is the output component, which can be stored for later use, displayed on a screen, or printed on paper.

System flowcharts are an important systems analysis, design and evaluation tool. A system flowchart begins by identifying system inputs and their origins. The input is followed by the processing performed on the data. The resulting new information is the output component, which can be stored for later use, displayed on a screen, or printed on paper. In many instances, the output from one process is an input to another.

System flowcharts are an important system analysis, design, and evaluation tool. They are universally employed in systems work and provide an immediate form of communication among workers. The system flowchart is an excellent vehicle for describing information flows and procedures within an accounting information system.

Program flowcharts illustrate the sequence of logical operations performed by a computer in executing a program. A program flowchart describes the specific logic used to perform a process shown on a system flowchart. Program flowcharts employ a subset of the symbols shown in figure 3.8. once designed and approved, the program flowchart serves as the blueprint for coding the computer program.

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