Information Systems from an Accountant's Perspective

Chapter 1

1. The Information System An

accountant’s perspective

•

Information

: - 

is data that have been

organized and processed to provide meaning

and improve the decision-making process. As a

rule, users make better decisions as the

quantity and quality of information increase.

Information allows users to take action to

resolve conflicts, reduce uncertainty, and make

decisions.

•

Data

:-

are facts that are collected, recorded,

stored, and processed by an information system.

Businesses need to collect several kinds of data,

such as the activities that take place, the

resources affected by the activities, and the

people who participate in the activity. For

example, the business needs to collect data about

a sale (date, total amount), the resource sold

(good or service, quantity sold, unit price), and

the people who participated (customer,

salesperson).

•

Quality of Information

•

Regardless of physical form, useful information

has the following characteristics: 

•

Relevance- 

The contents of a report or document

must serve a purpose.

•

Reports containing irrelevancies waste resources

and may be counterproductive to the user.

Irrelevancies detract attention from the true

message of the report and may result in incorrect

decisions or actions.

•

T

i

m

e

l

i

n

e

s

s

-

T

h

e

a

g

e

o

f

i

n

f

o

r

m

a

t

i

o

n

i

s

a

c

r

i

t

i

c

a

l

f

a

c

t

o

r

i

n

d

e

t

e

r

m

i

n

i

n

g

i

t

s

u

s

e

f

u

l

n

e

s

s

.

I

n

f

o

r

m

a

t

i

o

n

m

u

s

t

b

e

n

o

o

l

d

e

r

t

h

a

n

t

h

e

t

i

m

e

p

e

r

i

o

d

o

f

t

h

e

a

c

t

i

o

n

i

t

s

u

p

p

o

r

t

s

.

•

F

o

r

e

x

a

m

p

l

e

,

i

f

a

m

a

n

a

g

e

r

m

a

k

e

s

d

e

c

i

s

i

o

n

s

d

a

i

l

y

t

o

p

u

r

c

h

a

s

e

i

n

v

e

n

t

o

r

y

f

r

o

m

a

s

u

p

p

l

i

e

r

b

a

s

e

d

o

n

a

n

i

n

v

e

n

t

o

r

y

s

t

a

t

u

s

r

e

p

o

r

t

,

t

h

e

n

t

h

e

i

n

f

o

r

m

a

t

i

o

n

i

n

t

h

e

r

e

p

o

r

t

s

h

o

u

l

d

b

e

n

o

m

o

r

e

t

h

a

n

a

d

a

y

o

l

d

.

•

A

c

c

u

r

a

c

y

-

I

n

f

o

r

m

a

t

i

o

n

m

u

s

t

b

e

f

r

e

e

f

r

o

m

m

a

t

e

r

i

a

l

e

r

r

o

r

s

.

•

C

o

m

p

l

e

t

e

n

e

s

s

-

N

o

p

i

e

c

e

o

f

i

n

f

o

r

m

a

t

i

o

n

e

s

s

e

n

t

i

a

l

t

o

a

d

e

c

i

s

i

o

n

o

r

t

a

s

k

s

h

o

u

l

d

b

e

m

i

s

s

i

n

g

.

•

S

u

m

m

a

r

i

z

a

t

i

o

n

-

I

n

f

o

r

m

a

t

i

o

n

s

h

o

u

l

d

b

e

a

g

g

r

e

g

a

t

e

/

c

o

m

p

r

e

h

e

n

s

i

v

e

i

n

a

c

c

o

r

d

a

n

c

e

w

i

t

h

t

h

e

u

s

e

r

’

s

n

e

e

d

s

.

•

Lower-level managers tend to need

information that is highly detailed. As

information flows upward through the

organization to top management, it

becomes more summarized

•

F

e

e

d

b

a

c

k

-

i

s

a

f

o

r

m

o

f

o

u

t

p

u

t

t

h

a

t

i

s

s

e

n

t

b

a

c

k

t

o

t

h

e

s

y

s

t

e

m

a

s

a

s

o

u

r

c

e

o

f

d

a

t

a

.

•

 Feedback may be internal or external and

is used to initiate or alter a process.

1

.

2

.

T

h

e

s

y

s

t

e

m

e

n

v

i

r

o

n

m

e

n

t

•

E

l

e

m

e

n

t

s

o

f

a

S

y

s

t

e

m

-

A

s

y

s

t

e

m

i

s

a

g

r

o

u

p

o

f

t

w

o

o

r

m

o

r

e

i

n

t

e

r

r

e

l

a

t

e

d

c

o

m

p

o

n

e

n

t

s

o

r

s

u

b

s

y

s

t

e

m

s

t

h

a

t

i

n

t

e

r

a

c

t

t

o

s

e

r

v

e

a

c

o

m

m

o

n

p

u

r

p

o

s

e

.

M

u

l

t

i

p

l

e

C

o

m

p

o

n

e

n

t

s

R

e

l

a

t

e

d

n

e

s

s

S

y

s

t

e

m

v

e

r

s

u

s

S

u

b

s

y

s

t

e

m

P

u

r

p

o

s

e

1

.

5

.

T

h

e

E

v

o

l

u

t

i

o

n

o

f

I

n

f

o

r

m

a

t

i

o

n

S

y

s

t

e

m

M

o

d

e

l

s

•

T

h

e

m

a

n

u

a

l

p

r

o

c

e

s

s

m

o

d

e

l

•

T

h

e

F

l

a

t

-

F

i

l

e

M

o

d

e

l

•

T

h

e

D

a

t

a

b

a

s

e

M

o

d

e

l

•

T

h

e

R

e

s

o

u

r

c

e

s

,

E

v

e

n

t

s

,

a

n

d

A

g

e

n

t

s

(

R

E

A

)

M

o

d

e

l

•

E

n

t

e

r

p

r

i

s

e

R

e

s

o

u

r

c

e

P

l

a

n

n

i

n

g

S

y

s

t

e

m

s

•

A

c

c

o

u

n

t

a

n

t

’

s

R

o

l

e

i

n

t

h

e

i

n

f

o

r

m

a

t

i

o

n

s

y

s

t

e

m

C

H

A

P

T

E

R

T

W

O

2

.

A

N

O

V

E

R

V

I

E

W

O

F

T

R

A

N

S

A

C

T

I

O

N

P

R

O

C

E

S

S

I

N

G

•

2

.

1

.

T

r

a

n

s

a

c

t

i

o

n

C

y

c

l

e

s

•

2

.

2

.

E

x

p

e

n

d

i

t

u

r

e

C

y

c

l

e

•

2

.

3

.

C

o

n

v

e

r

s

i

o

n

C

y

c

l

e

•

2

.

4

.

T

h

e

R

e

v

e

n

u

e

C

y

c

l

e

A

c

c

o

u

n

t

i

n

g

R

e

c

o

r

d

s

•

M

a

n

u

a

l

S

y

s

t

e

m

s

•

J

o

u

r

n

a

l

s

•

L

e

d

g

e

r

s

C

H

A

P

T

E

R

3

M

A

N

A

G

I

N

G

D

A

T

A

R

E

S

O

U

R

C

E

S

•

Data is vital organization resources that

need to be managed like other important

business assets.

F

i

l

e

O

r

g

a

n

i

z

a

t

i

o

n

T

e

r

m

s

a

n

d

C

o

n

c

e

p

t

s

•

A

p

p

r

o

a

c

h

e

s

t

o

F

i

l

e

M

a

n

a

g

e

m

e

n

t

•

D

a

t

a

B

a

s

e

M

o

d

e

l

s

•

E

l

e

m

e

n

t

s

o

f

t

h

e

D

a

t

a

b

a

s

e

E

n

v

i

r

o

n

m

e

n

t

•

C

h

a

p

t

e

r

F

o

u

r

•

4

.

I

n

t

r

o

d

u

c

t

i

o

n

t

o

s

y

s

t

e

m

d

e

v

e

l

o

p

m

e

n

t

l

i

f

e

c

y

c

l

e

•

4

.

1

D

e

f

i

n

i

t

i

o

n

o

f

S

y

s

t

e

m

D

e

v

e

l

o

p

m

e

n

t

L

i

f

e

C

y

c

l

e

•

System development life cycle is a

systematic process of developing or

acquiring a new system, design a system,

implementation and use of it system.

•

S

y

s

t

e

m

A

n

a

l

y

s

i

s

•

The information needed to purchase or

develop a new system is gathered.

•

Requests for systems development are

prioritized to maximally utilize limited

development resources

•

S

t

e

p

s

i

n

s

y

s

t

e

m

a

n

a

l

y

s

i

s

•

Initial Investigation

•

Systems Survey

•

Feasibility study

•

Information needs and system

requirements

•

System analysis report

•

C

h

a

p

t

e

r

F

i

v

e

•

C

o

n

c

e

p

t

u

a

l

D

e

s

i

g

n

•

The company decides how to meet user

needs. The first task is to identify and

evaluate appropriate design alternatives.

•

C

o

n

c

e

p

t

u

a

l

s

y

s

t

e

m

d

e

s

i

g

n

:

A

g

e

n

e

r

a

l

f

r

a

m

e

w

o

r

k

i

s

d

e

v

e

l

o

p

e

d

f

o

r

i

m

p

l

e

m

e

n

t

i

n

g

u

s

e

r

r

e

q

u

i

r

e

m

e

n

t

s

a

n

d

s

o

l

v

i

n

g

p

r

o

b

l

e

m

s

i

d

e

n

t

i

f

i

e

d

i

n

t

h

e

a

n

a

l

y

s

i

s

p

h

a

s

e

.

•

4

.

1

.

2

.

1

E

v

a

l

u

a

t

e

d

e

s

i

g

n

a

l

t

e

r

n

a

t

i

v

e

s

•

There are many ways to design AIS, so the

design team must continually make design

decisions like:

–

Should the company mail hard copy purchase

orders or use EDI?

–

Should the company have a large centralized

mainframe and database, or distribute

computer power to stores?

P

r

e

p

a

r

i

n

g

d

e

s

i

g

n

s

p

e

c

i

f

i

c

a

t

i

o

n

•

Once a design alternative has been

selected, the project team develops the

conceptual design specifications for the

following elements: Output, Data storage,

Input and Processing procedures and

operations

•

4

.

2

s

y

s

t

e

m

d

e

v

e

l

o

p

m

e

n

t

p

l

a

n

n

i

n

g

•

Each of systems development project

requires a plan, and each phase of each

development plan must also be planned.

Systems development planning is an

important step for a number of key reasons:

•

Consistency, Efficiency, Cutting edge,

Lower costs and Adaptability

4

.

3

B

e

h

a

v

i

o

r

a

l

a

s

p

e

c

t

s

o

f

c

h

a

n

g

e

•

Aggression: behaviors that are intended to

produce errors with the new system, or

weaken the effectiveness of the new

system

•

Projection: blame the new system for

everything that goes wrong

•

Avoidance: ignore the new system in hopes

that it will eventually go away

•

4

.

4

W

h

o

I

s

I

n

v

o

l

v

e

d

i

n

t

h

e

S

D

L

C

?

•

Information Systems Steering Committee:

Executive level, plans and oversees IS

function; facilitates coordination with

integration of systems activities

•

Project Development Team: Plan and

monitor project progress

•

Programmers: Write and test programs

according to analysts specifications

•

Systems Analysts: Determine information

needs, prepare specifications for

programmers

•

Management: Get users involved in the

process, provide support for development

projects, align projects to meet

organizations strategic needs

•

Users: Communicate needs to system

developers, help design and test to ensure

complete and accurate processing of data

CHAPTER six:

System Development and

Documentation Tools &

Techniques

Documentation

Documentation

•

Documentation 

explains how a system

works, including the 

who

, 

what

, 

when

,

where

, 

why

, and 

how

 of:

–

data entry

–

data processing

–

data storage

–

information output

–

system controls

Why Document Systems?

Why Document Systems?

•

Accountants must be able to 

read

documentation and 

understand

 how a

system works.

•

Accounting Acts requires management to

assess internal controls 

and auditors to

evaluate the assessment

•

Used for 

systems development 

and

changes



It has been said that a picture is worth a

thousand words, and that certainly is true when it

comes to an easy way to understand an

organization’s information system. Documenting

an information system requires great skill;

however, the ability to understand and read a

documentation can be quite intuitive.



Although there are many methods used in

business to document systems, the text uses the

three most popular for accountants: data flow

diagrams, systems flowcharts, and Business

Process Modeling Notation (BPMN).

D

D

o

o

c

c

u

u

m

m

e

e

n

n

t

t

a

a

t

t

i

i

o

o

n

n

T

T

o

o

o

o

l

l

s

s

•

Documentation tools are important on the

following levels:

–

you must be able to 

read 

documentation 

to

determine how a system works.

–

You may need to 

evaluate 

documentation 

to

identify internal control strengths 

&

weaknesses 

&

 recommend improvements

.

–

More skill is needed to 

prepare

documentation 

that shows how an existing

or proposed system operates.

D

D

o

o

c

c

u

u

m

m

e

e

n

n

t

t

a

a

t

t

i

i

o

o

n

n

T

T

o

o

o

o

l

l

s

s

•

There are three common systems

documentation tools

–

Data flow diagram (DFD)

–

Flowchart

•

Document flowchart

•

System flowchart

•

Program flowchart

–

Business Process diagrams

Data Flow Diagrams (DFD)

Data Flow Diagrams (DFD)

•

Focuses on the data flows for:

–

Processes

–

Sources 

and

destinations

of the data

–

Data stores

•

DFD are visually simple, can be used to

represent the same process at a high

abstract or detailed level.

•

It uses 

four symbols 

to represent four

basic elements:

D

a

t

a

f

l

o

w

d

i

a

g

r

a

m

(

D

F

D

)

There are four basic symbols to the data flow diagram:

1.

The square box symbol represents where the data is coming

from (source) and where it ends up (destination). An example,

from a revenue cycle perspective is that the customer would

be a data source.

2. The arrows are symbols showing the directional flow of data

from a source to either: a transformative process, data store, or

data destination.

3.

The circle is a symbol that shows a transformative process.

This can be at a high “context” level such as “process

Revenue cycle”; or it could be at a more detailed level such

as “sales order entry”

4. The two horizontal lines represent data storage

In addition, you may see a triangle used in a DFD which would

identify controls associated with the process.

DFD

DFD

Basic Data Flow Diagram

Basic Data Flow Diagram

Elements

Elements

Data Flow Diagram of Customer Payment Process

Data Flow Diagram of Customer Payment Process

DFD

DFD

•

A 

data source 

and a 

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.

•

They are represented by 

squares

.

DFD

DFD

•

A 

data flow 

is the movement of data among

processes, stores, sources, and destinations.

•

Data that pass between data stores and a

source or destination must go through a 

data

transformation process.

•

Data flows are 

labeled

 to show what data is

flowing.

•

If two or more data flows move together, a

single line 

is used.

•

If the data flow separately, 

two lines 

are used.

Splitting Customer Payments and Inquiries

Splitting Customer Payments and Inquiries

DFD

DFD

•

Processes

represent the transformation of

data.

•

A 

data store 

is a repository of data.

•

DFDs do not show the 

physical storage

medium

 (such as a server or paper) used to

store the data.

•

Data stores are represented by 

horizontal

lines

, with the name of the file written

inside the lines.

S

S

u

u

b

b

d

d

i

i

v

v

i

i

d

d

i

i

n

n

g

g

t

t

h

h

e

e

D

D

F

F

D

D

•

DFDs 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.

•

Also, users have 

differing needs

, and a

variety of levels can better satisfy 

differing

requirements.

S

S

u

u

b

b

d

d

i

i

v

v

i

i

d

d

i

i

n

n

g

g

t

t

h

h

e

e

D

D

F

F

D

D

•

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 

& the

entities

 that are the sources and

destinations of system 

inputs and outputs

.

C

o

n

t

e

x

t

D

i

a

g

r

a

m

f

o

r

S

&

S

P

a

y

r

o

l

l

P

r

o

c

e

s

s

i

n

g

Lower - Level DFD

Lower - Level DFD

•

Ayele used the narrative description of S&S’s

payroll processing procedures to 

decompose

 the

context diagram into successively 

lower levels,

each with more detail.

•

The narrative describes five 

data processing

activities:

–

Updating

 the employee/payroll master file

–

Handling employee 

compensation

–

Generating 

management reports 

–

Paying 

taxes

–

Posting

 entries to the general ledger

•

Ayele 

exploded his context diagram 

and

created the 

Level 0 DFD

•

Notice that some data inputs and outputs

have been 

excluded

 from this DFD.

•

For example, in process 2.0, the data

inflows and outflows that are not related to

an external entity or to another process are

not depicted (tax tables and payroll

register).

L

L

e

e

v

v

e

e

l

l

0

0

D

D

F

F

D

D

f

f

o

o

r

r

S

S

&

&

S

S

P

P

a

a

y

y

r

r

o

o

l

l

l

l

P

P

r

r

o

o

c

c

e

e

s

s

s

s

i

i

n

n

g

g

•

Ayele 

exploded process 2.0 

(pay

employees) to create a 

Level 1 DFD

.

•

The following figure provides more detail

about the data processes involved in paying

employees, and it includes the tax rates

table and the payroll register data flow

omitted from the above figure.

L

L

e

e

v

v

e

e

l

l

1

1

D

D

F

F

D

D

f

f

o

o

r

r

P

P

r

r

o

o

c

c

e

e

s

s

s

s

2

2

.

.

0

0

i

i

n

n

S

S

&

&

S

S

P

P

a

a

y

y

r

r

o

o

l

l

l

l

P

P

r

r

o

o

c

c

e

e

s

s

s

s

i

i

n

n

g

g

Basic Guidelines for creating a DFD

•

Understand the system 

that

you are trying to represent.

•

A DFD is a simple

representation meaning

that you need to 

consider

what is relevant and what

needs to be included.

•

Start with a high level 

to

show how data flows

between outside entities 

&

inside the system.

•

Use 

additional DFD’s at the

detailed level 

to show how

data flows within the

system.

•

Identify and group 

all the

basic elements of the DFD.

•

Name data elements 

with

descriptive names, use

action verbs for processes

(e.g., update, edit, prepare,

validate, etc.).

•

Give each process a

sequential number 

to help

the reader navigate from

the abstract to the detailed

levels.

•

Edit/Review/Refine

 your

DFD to make it easy to read

and understand.

1.

U

n

d

e

r

s

t

a

n

d

t

h

e

s

y

s

t

e

m

t

h

a

t

y

o

u

a

r

e

t

r

y

i

n

g

t

o

r

e

p

r

e

s

e

n

t

:

i

f

y

o

u

d

o

n

’

t

u

n

d

e

r

s

t

a

n

d

t

h

e

s

y

s

t

e

m

t

h

a

t

y

o

u

a

r

e

t

r

y

i

n

g

t

o

v

i

s

u

a

l

l

y

r

e

p

r

e

s

e

n

t

,

n

o

o

n

e

e

l

s

e

w

i

l

l

u

n

d

e

r

s

t

a

n

d

w

h

a

t

y

o

u

c

r

e

a

t

e

d

.

W

a

y

s

t

o

h

e

l

p

y

o

u

u

n

d

e

r

s

t

a

n

d

a

r

e

t

o

a

c

t

u

a

l

l

y

o

b

s

e

r

v

e

t

h

e

p

r

o

c

e

s

s

t

a

k

i

n

g

p

l

a

c

e

,

i

n

t

e

r

v

i

e

w

a

n

d

a

s

k

q

u

e

s

t

i

o

n

s

,

a

n

d

t

r

y

t

o

d

o

a

w

a

l

k

t

h

r

o

u

g

h

o

f

a

t

r

a

n

s

a

c

t

i

o

n

t

o

u

n

d

e

r

s

t

a

n

d

h

o

w

t

h

e

d

a

t

a

f

l

o

w

s

,

w

h

e

r

e

i

t

g

e

n

e

r

a

t

e

s

f

r

o

m

,

w

h

a

t

a

c

t

i

v

i

t

i

e

s

o

c

c

u

r

w

i

t

h

i

n

t

h

e

p

r

o

c

e

s

s

,

a

n

d

w

h

o

e

l

s

e

u

s

e

s

t

h

i

s

i

n

f

o

r

m

a

t

i

o

n

.

I

t

i

s

a

l

s

o

g

o

o

d

t

o

i

d

e

n

t

i

f

y

t

h

e

s

o

u

r

c

e

d

o

c

u

m

e

n

t

s

u

s

e

d

a

s

y

o

u

m

a

y

h

a

v

e

s

e

e

n

i

n

t

h

e

c

h

a

p

t

e

r

.

F

i

g

u

r

e

3

-

5

,

f

o

r

e

x

a

m

p

l

e

,

i

d

e

n

t

i

f

i

e

s

t

h

e

s

o

u

r

c

e

d

o

c

u

m

e

n

t

o

n

t

o

p

o

f

t

h

e

d

a

t

a

f

l

o

w

a

r

r

o

w

.

2.

O

n

l

y

r

e

l

e

v

a

n

t

d

a

t

a

e

l

e

m

e

n

t

s

s

h

o

u

l

d

b

e

i

n

c

l

u

d

e

d

i

n

t

h

e

d

a

t

a

f

l

o

w

d

i

a

g

r

a

m

.

3. Starting with a level of abstraction, generally

drawing a context DFD that shows the data flowing

between outside entities (e.g., customer) and

inside the organization allows for a simple big

picture of the process. Using a hierarchy to “drill

down” into the details (e.g., sales invoice process)

can show more information. By creating a

hierarchy of levels of detail allows the reader of the

DFD to either just get the overall big picture of a

process, or really get the details of a process. It

would be difficult and messy creating information

overload if there was no organization of the DFD

making the DFD too cluttered to read.

4

.

I

d

e

n

t

i

f

y

a

n

d

g

r

o

u

p

t

h

e

d

a

t

a

f

l

o

w

s

.

I

f

f

o

r

e

x

a

m

p

l

e

,

t

h

e

d

a

t

a

f

l

o

w

s

t

o

g

e

t

h

e

r

t

h

e

y

a

r

e

i

n

o

n

e

a

r

r

o

w

,

w

h

e

n

i

t

s

e

p

a

r

a

t

e

s

o

u

t

t

h

e

n

u

s

e

m

u

l

t

i

p

l

e

a

r

r

o

w

s

.

A

n

e

x

a

m

p

l

e

o

f

t

h

i

s

w

o

u

l

d

b

e

a

s

a

l

e

s

o

r

d

e

r

,

s

o

m

e

o

r

d

e

r

s

m

a

y

b

e

a

p

p

r

o

v

e

d

a

n

d

c

o

n

t

i

n

u

e

t

o

m

o

v

e

t

h

r

o

u

g

h

t

h

e

p

r

o

c

e

s

s

w

h

e

r

e

a

s

o

t

h

e

r

s

m

a

y

n

o

t

b

e

a

p

p

r

o

v

e

d

a

n

d

w

o

u

l

d

f

l

o

w

b

a

c

k

t

o

t

h

e

c

u

s

t

o

m

e

r

.

S

i

m

i

l

a

r

l

y

,

i

d

e

n

t

i

f

y

a

n

d

g

r

o

u

p

t

r

a

n

s

f

o

r

m

a

t

i

o

n

p

r

o

c

e

s

s

e

s

,

d

a

t

a

s

t

o

r

e

s

,

d

a

t

a

s

o

u

r

c

e

s

,

a

n

d

d

e

s

t

i

n

a

t

i

o

n

s

.

5. By being descriptive it helps the reader understand the

process better.

6. Giving a process a sequential number helps provide an

information trail to the reader of the DFD as they move

from abstract to detailed versions of the process.

7. As with anything, refining your draft and receiving

feedback help provide for a clear understanding as to

what you intend the reader will understand from your DFD

Flowcharts

Flowcharts

•

A 

flowchart 

is a 

pictorial

, 

analytical

technique

 used to 

describe

 some aspect

of an information system in a clear,

concise, and logical manner.

•

Flowcharts 

record

how business

processes are performed 

and 

how

documents flow

 through the organization.

•

They are also used to 

analyze how to

improve business processes 

and

document flows

.

Flowcharting symbols

Flowcharting symbols

•

Divided into 

four

 categories:

–

Input/output

 symbols 

–

Processing

 symbols 

–

Storage

 symbols 

–

Flow and miscellaneous 

symbols

F

l

o

w

c

h

a

r

t

s

S

y

m

b

o

l

s

Types of Flowcharts

Types of Flowcharts

•

Document flowcharts:

–

developed to illustrate the 

flow of documents and

data

 among areas of responsibility within an

organization.

–

They trace a document showing where each

document 

originates

, its 

distribution

, its 

purpose

,

its 

disposition

, and 

everything that happens 

as it

flows through the system.

–

A special type of flowchart, called an 

internal

control flowchart

is used to describe, analyze, and

evaluate internal controls.

D

o

c

u

m

e

n

t

F

l

o

w

c

h

a

r

t

o

f

P

a

y

r

o

l

l

P

r

o

c

e

s

s

i

n

g

a

t

S

&

S

D

o

c

u

m

e

n

t

F

l

o

w

c

h

a

r

t

o

f

P

a

y

r

o

l

l

P

r

o

c

e

s

s

i

n

g

a

t

S

&

S

Types of Flowcharts

Types of Flowcharts

•

System flowchart:

–

depicts the 

relationships

 among system

input, processing, storage, and output.

–

The sales processing flowchart in the

following figure represents Ayele’s

proposal to capture 

sales data 

using

state-of-the-art sales terminals.

–

The terminals will 

capture and edit 

the

sales data and print a customer receipt.

S

y

s

t

e

m

F

l

o

w

c

h

a

r

t

o

f

S

a

l

e

s

P

r

o

c

e

s

s

i

n

g

a

t

S

&

S

System flowchart:

System flowchart:

•

The terminals 

periodically send all sales

data

 to corporate headquarters so that the

accounts receivable, inventory, and

sales/marketing 

databases

 and the

general ledger can be updated

.

•

Management and other users 

can access

the files

 at any time by using an 

inquiry

processing system.

Types of Flowcharts

Types of Flowcharts

•

Program flowchart:

–

Illustrates the 

sequence of logical operations

performed by a computer in executing a program.

–

The relationship between system & program

flowcharts is shown in the following figure.

–

System flowcharts are 

used to describe data

flows and procedures

 within an AIS.

–

A program flowchart 

describes the specific logic

used to perform a process

 shown on a system

flowchart.

R

e

l

a

t

i

o

n

s

h

i

p

B

e

t

w

e

e

n

S

y

s

t

e

m

a

n

d

P

r

o

g

r

a

m

F

l

o

w

c

h

a

r

t

s

Guidelines for Drawing Flowcharts

Guidelines for Drawing Flowcharts

•

Understand the system 

you are trying to

represent.

•

Identify

 business processes, documents,

data flows, and data processing procedures.

•

Organize the flowchart 

so as it reads from

top to bottom and left to right.

•

Name elements 

descriptively.

•

Edit/Review/Refine

 to make it easy to read

and understand.