Chapter 2
 Systems
Bodnar/Hopwood AIS 7th Ed
Techniques and Documentation
1
Compliance vs Substantive
Testing
 Compliance Testing
confirms
 assesses
 checks


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the continuity of operation of internal controls (IC)
2
Compliance vs Substantive
Testing
 Substantive Testing

verifies

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financial statements
3
Types of Flowcharts
IPO
and HIPO
Systems and Program
Analytic and Document
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IPO and HIPO
primarily narrative in nature
 used primarily by systems development
personnel

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Commonly Used Flowcharts
•
•
•
•
Document Flowcharts
Systems Flowcharts
Program Flowcharts
Data Flow Diagrams
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Document Flowcharts
Flowcharts are pictorial representations of
transaction processing systems that portray flows
of some type.
 A Document Flowchart emphasizes the hardcopy
inputs and outputs and their flows through
organizational units.
 Auditors and accountants may use document
flowcharts when analyzing a current system for
weaknesses in controls and reports.

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A Sample Document Flowchart
Requesting Department
Goods Requisition
Form1
2
Central Supplies Department
A
1
Goods Requisition
Form
A
File
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Systems Flowchart
a
pictorial or graphical representation of the
overall flow of work, documents, and
operations in a system
 systems flowcharts are used by both
auditors and systems development
personnel
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System Flowcharts
 They
use symbols that are industry
conventions standardized by the American
National Standards Institute (ANSI).
 Flowcharting symbols are grouped as inputoutput symbols, processing symbols,
storage symbols, data and information flow
symbols, and miscellaneous symbols.
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Flowchart Symbols: Documents
Shipping
Receipt
Invoice
1
2
3
(A)
Single
Document
4 Sales
Invoice
4
Sales
Order
(B)
Overlapping symbolssame document
3
2
Invoice
(C)
Two overlapping
symbols - same
document
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(D)
Two overlapping symbols different documents
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Flowchart Symbols
(A)
On-line Manual
Device
(B)
Terminal
Display
(C)
I/O
(Input/Output)
(D)
Manual
Process
(E)
On-line
Computer
Process
(I)
Disk
Storage
(J)
Magnetic
Tape
Storage
N
A
Permanent Temporary
File
File
(F)
Off-line or
Noncomputer
Process
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(G)
Off-line
Paper
File
(H)
On-line
Data
Storage
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Flowchart Symbols
on page 2:
1
To
Customer
Start
p.4
1
Indicates the flow will continue
at the on-page connector #1
to page 4
connector #1
on page 4:
From
Bank
(A)
Enter/Exit
System
(E)
Annotation
(B)
Start
(or end)
Process
1
Indicates where the flow continues
from the on-page connector #1
(C)
On-page
Connectors
(G)
(F)
Calculator/
Decision
Register
Tape
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1
p.2
connector #1
from page 2
(D)
Off-page
Connectors
---------------
(H)
Physical
Object
(I)
Flow
Lines
(J)
Communication
Link
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Systems Flowcharting Guidelines
 Sketch
a flowchart before designing
the final draft.
 Use annotated descriptions and
comments in flowcharts for
clarification.
 Within a file symbol, (a) may be placed to
show alphabetic storage or documents, (c) for
chronological, and (n) for numeric.
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Systems Flowcharting Guidelines
 Flowcharts
should read from top to bottom
and left to right.
 Use appropriate symbols; the variety should
be limited for clarity.
 Sandwich rule - a process symbol should
always be found between an input and an
output symbol.
 Use connectors to avoid crossed lines and
cluttered flowcharts.
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Flowchart Element : Flow Lines
 Flow
lines are used to connect the symbols
on the document flow chart.
 A solid line indicates the flow of a
document or object
 A dotted or dashed symbol indicates a flow
of information rather than the physical
document
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Flowchart Element : Flow Lines
 Arrows
are used when the documents or
information flow is not left-to-right or topto-bottom
 Some flowcharts also show communication
flows such as by telephone modem or
satellite
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Flowcharting Element:
Area of Responsibility
 Areas
of responsibility are displayed to enable th
flowchart reader to clearly identify changes in
responsibility as the documents flow through the
system.
 They are represented on flowcharts by segmentin
and labeling columns.
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Flowcharting Element:
Area of Responsibility
 Areas
of responsibility may be departments,
sections within a department, or individual
employees within a department.
 Judgment must be used in choosing the
level of subdivision that one column should
represent.
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Preparation Conventions
 Left-to-right,
Top-to-bottom
 All documents must have an
origin and termination


indicate origin by darkening
one corner of the symbol
each copy of the document
must flow to
a permanent file symbol
 a symbol denoting an exit from
the system, or

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
Keep flowcharts
uncluttered



place areas with frequent
interchange in adjacent
columns
enter narrative only in
symbols
Make sure progress of a
document is clear.
Diagram a document
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Preparation Conventions
an off-page connector
 a document destruction
symbol (small black
box)
 “cradle to grave”
documentation

 before
and after each
process



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entering or leaving a
file
entering or leaving a
page or area of
responsibility
Make sure the
flowchart is complete
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Program Flowchart
a
flowchart indicating detailed processing
functions
 program flowcharts are used primarily by
systems development personnel
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Logical Data Flow Diagrams
 Shows
the system’s processes and the flows
of data into and out of the processes, i.e.,
provides a logical view of the system.
 Represents what tasks the system is doing,
without emphasis on how, where, or by
whom the tasks are being performed.
 Appropriate for a macro-view of the system.
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Data Flow Diagrams (DFD)
Data flow diagramming symbols are used for a
variety of system analysis purposes, including
graphically displaying the logical flows of data
through a process.
 Unlike flowcharts which represent the physical
components of an information system, data flow
diagrams can provide a more conceptual,
nonphysical display of the movement of data
through a system.

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Data Flow Diagrams (DFD)
 Data
flow diagrams disregard such things as
organizational units, the computer on which the
data are processed, and the media on which the
data are stored.
 The movement of data across offices or
departments within a particular system
environment are not represented.
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Data Flow Diagram Symbols
(A)
Process
(C)
Data store
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(B)
Data inflow sources,
information outflow
destinations
(D)
Data flow lines
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Data Flow Diagram Symbols
 Process




Circles are used to represent processes
that take data inflows and transform
them to information outflows.
The circle contains two labels.
The first label is a process number
(explained later) and the second is a
process name.
Some use rectangular boxes with
rounded corners.
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(A)
Process
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Data Flow Diagram Symbols
 Data



Sources and Sinks
Rectangles (or squares) represent data
(inflow) sources and (information outflow)
sinks
The rectangle is labeled with the name of the
data source or sink/destination (e.g.
Customer, Vendors, Government Agency).
The sources and sinks play an important role
in the data flow diagram.
(B)
Data inflow
sources,
information
outflow
destinations

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Data Flow Diagram Symbols


The sources and sinks are agents external to (i.e.
outside the scope of) the system represented on the
diagram.
They delineate the boundaries of the system.
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Data Flow Diagram Symbols
 Data




Stores
Inventory
Two parallel straight lines are used to
display a store or collection of data.
(C)
Some people refer to data stores as data at
Data store
rest.
A description of the data store contents is
entered on the symbol.
Data stores are used anytime it is
necessary to store the output from a
process before sending it on to the next
process.

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Data Flow Diagram Symbols

Some use a rectangular box that is open at one end.
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Data Flow Diagram Symbols
 Data



Flow Lines
(D)
Data flow lines
Data flow lines display the route of data inflow and
information outflow.
They can be straight or curved lines.
The data flow is generally labeled with the name of the
data (e.g. a customer order, a bill, a financial analysis)
and the arrow indicates the direction of the data flow.
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Constraints: General Rules
 All processes should have unique
names. If two data flow lines (or data
stores) have the same label, they should
both refer to the exact same data flow
(or data store).
 The inputs to a process should differ
from the outputs of a process.
 Any single DFD should not have more
than about seven processes.
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Constraints: Process Rules
Incorrect
 No process can have only outputs.
(This would imply that the process is
Correct
making information from nothing.)
If an object has only outputs, then it
must be a source.
 No process can have only inputs.
(This is referred to as a “black hole”.)
If an object has only inputs, then it
must be a sink.
 A process has a verb phrase label.
Edit
Bodnar/Hopwood AIS 7th Ed
Incorrect
Correct
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Constraints: Data Store
 Data cannot move directly from one No
data store to another data store.
Yes
Data must be moved by a process.
 Data cannot move directly from an
outside source to a data store. Data No
must be moved by a process that
receives data from the source and places
Yes
the data in the data store.
 Data cannot move directly to an outside
No
sink from a data store.
Data must be moved by a process. Yes
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Constraints: Data Store

A data store has a noun phrase label.
CUSTOMER
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Constraints: Source/Sink
Data cannot move directly from a source to a sink. It
must be moved by a process if the data are of any concern
to the system. If data flows directly from a source to a
sink (and does not involved processing) then it is outside
the scope of the system and is not shown on the system
data flow diagram DFD.
Correct
Incorrect
Customer
A source/sink has a noun phrase label.
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Constraints: Data Flow
A data flow has only one direction between
symbols. It may flow in both directions
No
between a process and a data store to show a
read before an update. To effectively show a
read before an update, draw two separate Yes
arrows because the two steps (reading and
updating) occur at separate times.
A fork in a data flow means that exactly the
same data goes from a common location to No
two or more different processes, data stores,
or sources/sinks. (This usually indicates
different copies of the same data going to Yes
different locations.)
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A
B
A
A
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Constraints: Data Flow
. A join in a data flow means that
A data flow to a data store
exactly the same data comes from
means update (i.e., delete,
any of two or more different
add, or change).
processes, data stores, or
A data flow from a data store
sources/sinks, to a common location.
means retrieve or use.
A data flow cannot go directly back
A data flow has a noun
to the same process it leaves. There
phrase label. More than one
must be at least one other process
data flow noun phrase can
that handles the data flow, produces
appear on a single arrow as
some other data flow, and returns
long as all of the flows on
the original data flow to the
the same arrow move
originating process.
together as one package.
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Context Diagram

The highest level of data flow diagrams is the context
diagram.

A single system is represented on a context diagram and it
provides the scope of the system being represented
identified in a process symbol in the center of the diagram
labeled with a 0.

The context diagram shows one process (representing the
entire system) and the sources/sinks that represent the
boundaries of the system.
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Context Diagram

The data flow lines into the process represent the input
data to the system (provided by sources) and the data flow
lines from the process represent the output information
from the system (going to the sinks).
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Context Level Diagram
Events Driven System
Customers
External
Events
Reports
0
Events
Driven
System
Internal
Departments
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Internal
Events
Financial
Statements
Management
Investors
and
Creditors
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Level Zero DFD Example
1.0
Process
Customer
Orders
Shipping Request
Bill
Customers
2.0
Deliveries to
Customers
Decision
Makers
Accounts Receivable
3.0
Process
Payments
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Level One - Record Event Data
External event:
Record Sale of
Merchandise
Sales Invoice
Data
1.1
Prepare
Sales
Invoice
1.2
Review
Customer
Credit
Approved
Sales Invoice
Data
1.3
Record
Sales
Event Data
Bodnar/Hopwood AIS 7th Ed
Sale Event Data
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Version 1
Example Data Flow Diagram
Example Flowchart
Factory
Supervisor
Factory
supervisor
Time
cards
Accounting
Payroll Clerk
1
Time
cards
2
N
Review
time
cards
Time
cards
1
2
N
Reviewed
time
cards
Record
weekly
wages
Employee Earnings
Records
Record
wages
A
Time card file
(alpha)
Bodnar/Hopwood AIS 7th Ed
Review
time
cards
Employee
Earnings
Records
A= alphabetic
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Analytic Flowchart
 charts
the flow of documents and
processing between different entities which are represented by separate columns
in the flowchart.
 Examples of analytic flowcharts
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Analytic flowcharts and Internal
Control Analysis
 the
grouping of functions facilitates analysis
of segregation of duties
 interfaces between entities are emphasized
 interfaces are important control points in a
system
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