 Documentation encompasses

◦ Narratives (written descriptions)

◦ Flowcharts
◦ Diagrams and
◦ Other written material that explain how the system
works
 Documentation covers the who, what, when,
where, why, and how of:
◦ Data entry
◦ Processing
◦ Storage
◦ Information output
◦ System controls
How do accountants use
documentation?

◦ At a minimum, they have to read

documentation to understand how a
system works.

◦ They may need to evaluate the

strengths and weaknesses of an
entity’s internal controls.
 In this chapter, we discuss two of the most common
documentation tools:

1. Data flow diagrams

A graphical description of the source and destination

of data that shows data flow within an organization, the
processes performed on the data and how data are
stored.

They show:

– Where data comes from

– How it flows

– The processes performed on it

– Where it goes
 2. Flowcharts

• Include three types:

- Document flowcharts – a graphical description

of the flow of documents and information
between departments or areas of responsibility
within an organization.
- System flowcharts a graphical description of the
relationship among the input, processing,
and output in an information system.
- Program flowcharts a graphical description of
the sequence of logical operations that a
computer performs as it executes a program.

`
 Documentation tools help accountants by:

◦ Organizing very complicated systems into a

form that can be more readily understood

◦ Helping new team members to understand a

pre-existing system
 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

 • Example of a data flow
diagram of the
customer payment Accounts
process Receivable

Customer 1.0 Remittance 2.0 Receivables

Customer Payment Process data Update Information Credit
Payment A/R Manager

Deposit

Bank
A data flow diagram consists of four
basic elements:
◦ Data sources and destinations
◦ Data flows
◦ Transformation processes
◦ Data stores
 Data sources and destinations
◦ Appear as squares

◦ Represent organizations or individuals that

send or receive data used or produced by
the system
 An item can be both a source and a destination
 • Data sources and
destinations are
marked in red.
Accounts
Receivable

Customer 1.0 Remittance 2.0 Receivables

Customer payment Process data Update Information Credit
Payment A/R Manager

Deposit

Bank
Data flows
◦ Appear as arrows
◦ Represent the flow of data between sources
and destinations, processes, and data
stores
Data flow (customer payment)in the diagram
below consists of two parts: a payment and
remittance data.
process1.0 (process payment)split these two
data elements and sends them in different
directions.
The remittance data flows to another
process, where it is used to update accounts
receivable records, and the payment is sent
 • Data flows are
shown in red.
Accounts
Receivable

Customer 1.0 Remittance 2.0 Receivables

Customer payment Process data Update Information Credit
Payment A/R Manager

Deposit

Bank
ifa data flow is two-way, use a bi-
directional arrow.

Update
Genera
Receiv-
l
ables
Ledger
Iftwo data elements flow together, then
the use of one data flow line is
appropriate.

Cash Rec’t & Remittance Slip Process

Customer
Payment
If the data elements do not always
flow together, then multiple lines will
be needed.

Customer Inquiry Process

Customer Payment
Customer Payment
Transformation processes
◦ Appear as circles
◦ Represent the transformation of data
 • The transformation
processes are shown in red.
• Every process must have at Accounts
least one data inflow and Receivable
at least one data outflow.

Customer 1.0 Remittance 2.0 Receivables

Customer payment Process data Update Information Credit
Payment A/R Manager

Deposit

Bank
Data stores
◦ Data stores are represented by
horizontal lines, with respective name
recorded inside.
◦ Represent a temporary or permanent
repository of data.
 • The data store is
shown in red.
Accounts
Receivable

Customer 1.0 Remittance 2.0 Receivables

Customer payment Process data Update Information Credit
Payment A/R Manager

Deposit

Bank
 Data dictionary:

◦ Data flows and data stores are typically

collections of data elements.

◦ EXAMPLE: A data flow labeled student

information might contain elements such
as student name, date of birth, ID number,
address, phone number, and major.

◦ The data dictionary contains a

description of all data elements, data
stores, and data flows in a system.
 Sub divining the DFD
 Data flow diagrams are subdivided into successively
lower in order to provide ever increasing amounts of
detail because few systems can be diagrammed on one
sheet of paper .

 users have differing needs, so a variety of levels can

better satisfy these requirements.

 The highest –level DFD is referred to as a context

diagram.

 A context diagram provides the reader with a

summary level view of the system.

 it depicts a data processing system and the external

 DATA FLOW DIAGRAMS
nt Govt.
Depart- e Agencies
ym
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ard o rt
p
s re x
Ta
Payroll Employee checksEmployees
Processing
f orm System Pa
yro
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l o f o eck
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Human N e e l lr
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ResourcesEmp or
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Manage-
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FLOWCHARTS

A flowchart is an analytical technique

that describes some aspect of an
information system in a clear, concise,
and logical manner.
Flowcharts use a set of standard symbols
to depict processing procedures and the
flow of data.
 Flowchart symbols
 There are various types of symbols used to
create flowcharts .
 Each symbol has a special meaning that is
easily conveyed by its shape.
 There are four types of flowcharting symbols:
◦ 1. Input/output symbols: represent
devices or media that provide input to or
record output from processing operations
2. Processing symbols: indicate the type of
device used to process the data or
whether the data is processed manually.

3. Storage symbols: represent the device

used to store data that the system is not
currently using.

4. Flow and miscellaneous symbols:

indicate the flow of data and goods. They
also represent such operations as where
flowcharts begin and end, where decisions
 Input/output
Input/output Processing
Processing
Symbols
Symbols Symbols
Symbols

Storage
Storage Flow&&Misc.
Flow Misc.
Symbols
Symbols Symbols
Symbols