C HAPTER 3

System Development and

Documentation Techniques

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 INTRODUCTION

• In this chapter, we discuss two of the most

common documentation tools:
– Data flow diagrams
– Flowcharts
• Include three types:
– Document flowcharts describe the flow of documents and
information between departments or units.
– System flowcharts describe the relationship between inputs,
processing, and outputs for a system.
– Program flowcharts describe the sequence of logical
operations performed in a computer program.

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 What Is Documentation?

• Set of documents and models

– Narratives, data flow models, flowcharts
• Describe who, what, why, when, and where of
systems:
– Input, process, storage, output, and controls

Narratives means description of a system or a step-

by-step explanation of system components and
interactions.

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 Important level of documentation

• 1. To determine how system works

• 2. To identify strength, weakness and
recommend improvements.
• 3. To prepare internal control (IC)
documentation.

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 Why Should You Learn Documentation?

• You need to be able to read documentation in all its forms: narratives,

diagrams, models.
• You need to be able to evaluate the quality of systems, such as
internal control based in part on documentation.

– Documentation assists in auditor understanding and documentation of

their understanding
• Sarbanes-Oxley states that internal control report in public company
annual reports that management:
– Is responsible for establishing and maintaining internal control system
– Is responsible for assessing the effectiveness of the IC System
– Both management and external auditors need to document and test IC
System

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 Data Flow Diagrams

• Graphically describes the flow of data

within a system
• Four basic elements

Entity Data Flow

Process

Data Store

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 Entity

• Represents a source of data or input into the

system
or
• Represents a destination of data or output from
the system

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 Data Flows

• Movement of data among:

– Entities (sources or destinations)
– Processes
– Data stores
• Label should describe the information
moving

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 Process

• Represents the transformation of data from inputs to

outputs are represented by circles also referred to as
bubbles.

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 Data Store
• Represents data at rest

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 Data Flow Diagram Levels
• Context
– Highest level (most general)
– Purpose: show inputs and outputs into system
– Characteristics: one process symbol only, no data stores
• Level-0
• Purpose: show all major activity steps of a system
• Characteristics: processes are labeled 1.0, 2.0, and so on

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 DFD of customer payment process
Accounts
Receivable
(H)

Customer Receivables
Payment Remittance information
(B) Data (I)
Process (D) Update Credit
Customer
paymen Receivabl Manager
(A)
t (C) es (F) (K)

Deposit (E)

Bank
(J)

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 DFD Creation Guidelines

• Understand the system • Identify transformational

• Ignore certain aspects of the processes
system • Group transformational
• Determine system boundaries processes
• Develop a context DFD • Identify all data stores
• Identify data flows • Identify all sources and
• Group data flows destinations
• Number each process • Label all DFD elements
• Subdivide DFD

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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.

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 FLOWCHARTS

• Every shape on a flowchart depicts a unique

operation, input, processing activity, or storage
medium.
• Before PC’s were common, flowcharts were
commonly drawn with templates.
• Now, it is more common to use a software
program such as Visio.
– Microsoft and Power Point are also used
– The software uses pre-drawn shapes, and the
developer drags the shapes into the drawing.

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 DOCUMENT FLOWCHARTS

• A document flowchart shows the flow of

documents and information among areas of
responsibility in an organization.
• These flowcharts trace a document from origin
to disposition and show:
– Where a document comes from
– Where it’s distributed
– How it’s used
– It’s ultimate disposition
– Everything that happens as it flows through the
system
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 DOCUMENT FLOWCHARTS

• Internal control flowcharts are document

flowcharts used to evaluate the adequacy of
internal controls, such as segregation of duties or
internal checks.
• They can reveal weaknesses or inefficiencies
such as:
– Inadequate communication flows
– Unnecessarily complex document flows
– Procedures that cause wasteful delays
• Document flowcharts are also prepared in the
system design process.
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 Document Flowchart Symbols
A
Document Multiple-part Transmittal Off-line File
document Tape

Journal/ Manual Terminal

Ledger Process

On-page Off-page Annotation

Connector Connector

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 GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART
• Let’s step through some guidelines for
preparing a document flowchart:
– As with DFDs, you can’t effectively prepare a
flowchart if you don’t understand the system,
so:
• Interview users, developers, auditors, and
management.
• Administer questionnaires.
• Read through narratives.
• Walk through systems transactions

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 GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART
– Identify:
• All departments using the system (the parties
who “do” things in the story)
• All documents or information flows
• All processes performed on the documents
– As you read through a narrative, you may
want to mark the preceding items with
different shapes (e.g., drawing a rectangle
around entities, circling documents, etc.).

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 GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART
– Use separate columns for the activity of
each department.
• Example: If there are three different
departments or functions that “do” things in
the narrative, there would be three columns
on the flowchart.

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 GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART
– Flowchart the normal course of operations,
and identify exceptions with annotations.
– As much as possible, the flow should go from
top to bottom and left to right.
– Use standard flowcharting symbols, and draw
with a template or computer.
– Clearly label all symbols. Use annotations if
necessary to provide adequate explanation.
– Show where each document originated and
its final disposition.
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 GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART
– Every manual process should have at least
one input and at least one output.
– If a document goes into a process it must
come out
– Do not show process symbols for:
• Forwarding a document to another department
• Filing a document

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 Forwarding
a document

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 Filing
a document

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 GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART
– Do not connect two documents except when
forwarding to another column.
• When a document is forwarded, show it in
both locations.
– When using multiple copies of a document,
place document numbers in the upper, right-
hand corner.
– Show on-page connectors and label them
clearly to avoid excess flow lines.
– Use off-page connectors if the flow goes to
another page.
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 GUIDELINES FOR PREPARING A
DOCUMENT FLOWCHART
– If a flowchart takes more than one page, label
the pages as 1 of 5, 2 of 5, 3 of 5, etc.
– Show documents or reports first in the column
where they are created.
– Start with a rough draft; then redesign to
avoid clutter and crossed lines.
– Verify the accuracy of your flowchart by
reviewing it with users, etc.
– Place the flowchart name, the date, and the
preparer’s name on each page of the final
copy.
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 SYSTEM FLOWCHARTS

• Now that we’ve looked at document

flowcharts and guidelines for creating
flowcharts, let’s take a brief look at system
flowcharts.

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 SYSTEM FLOWCHARTS

• A system flowchart depicts the relationship

among the inputs, processes, and outputs of an
AIS.
• They are a pictorial representation of automated
processes and files
– The system flowchart begins by identifying the inputs
to the system.
– Each input is followed by a process, i.e., the steps
performed on the data.
– The process is followed by outputs—the resulting new
information.
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 Additional Flowcharting Symbols
for System Flowcharts

Automated Auxiliary Video On-line

Process Operation Display Keyboard

Keying Diskette Magnetic Magnetic On-Line

Operation Tape Disk Storage

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 • System
Flowchart
Shown in
Figure 10
in your
textbook

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 PROGRAM FLOWCHARTS

• Program flowcharts illustrate the sequence

of logical operations performed by a
computer in executing a program.
• They also follow an input – process –
output pattern.

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 • The program flowchart from
Figure 11 in your textbook is
shown on the right.
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 FLOWCHARTS VS. DFDs

• Now that we’ve examined both flowcharts

and DFDs, it may be useful to discuss the
differences again.
• DFDs place a heavy emphasis on the
logical aspects of a system.
• Flowcharts place more emphasis on the
physical characteristics of the system.

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 FLOWCHARTS VS. DFDs

• EXAMPLE: The registrar’s office of a

small college receives paper enrollment
forms from students. They sort these
records alphabetically and then update the
student record file to show the new
classes. They also prepare class lists from
the same data. The sorted enrollment
forms are forwarded to the bursar’s office
for billing purposes. Class lists are mailed
to faculty members.

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 Here’s a DFD
Students
that goes
with the
Enrollment
story.
Forms

1.0
Update Student
Student Records
Records

Enrollment
Forms

2.0
Prepare Bursar
Enrollment
Class Lists
Forms

Class
Lists

Faculty

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 Registrar’s Office

Students Enrollment Sort

Students
Forms Forms

Enrollment
Forms

Update Sorted
1.0 A Enrollment
Student
Update Student Forms
Records
Student Records
Records

Enrollment Sorted
Forms Prepare
Enrollment Class
Forms Lists
2.0
Prepare
Enrollment
Bursar Here’s a
Class Lists
Forms flowchart Sorted
Class
Class
that goes Lists
Enrollment
Forms
Lists with the
story
Faculty
Faculty Bursar

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 FLOWCHARTS VS. DFDs

• Now let’s change the story so that

students enter enrollment data online.
The registrar’s office sends a tape file of
the enrollment data to the bursar’s office
and continues to send paper class lists to
faculty.

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 Here’s the
Original
revised DFD.
Students
DFD Students

Enrollment Enrollment
Forms Data

1.0 1.0
Update Student Update Student
Student Records Student Records
Records Records

Enrollment Enrollment
Forms Data

2.0 2.0
Prepare Bursar Prepare Bursar
Enrollment Enrollment
Class Lists Class Lists
Forms Data

Class Class
Lists Lists

Faculty Faculty

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 Registrar’s Office Registrar’s Office

Enrollment Sort
Student Students Enrollment
Forms Forms
s Data

Update Sorted Update

A Enrollment Enrollment
Student Student
Forms Data
Records Records

Sorted Prepare
Enrollment Class Bursar
Prepare
Forms Lists Student Class
Records Lists

Sorted
Class
Lists
Enrollment Here’s the revised Class
Forms
flowchart. Lists

Faculty Bursar
Faculty
Original
Flowchart
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 FLOWCHARTS VS. DFDs

• Moral of the Story: Changes in the

physical characteristics of the process do
affect the flowchart but have little or no
impact on the DFD.
• The DFD focuses more on the logic.
• When deciding which tool to employ,
consider the information needs of those
who will view it.

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