Accounting information system an overview 9e bodnar hopwood chapter 02

Systems Techniques
and Documentation

Chapter 2

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–1


Learning Objective 1

Characterize the use of systems
techniques by auditors and
systems development personnel.

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–2


Users of Systems Techniques
Systems techniques are tools.
Analysis

Design

Documentation

They are largely graphical (pictorial) in nature.

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

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Use of Systems
Techniques in Auditing
What are the two basic components
of an auditing engagement?
1. The interim audit

2. The financial
statement audit

Compliance testing

Substantive testing

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–4


Internal Control Evaluation
Auditors are typically concerned with the
flow of processing and distribution of
documents within an application system.
Auditors use charts to analyze the
distribution of documents in a system.

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–5


Compliance Testing
Compliance testing requires an understanding
of the controls that are to be tested.
Auditors must have a basic understanding
of systems techniques.
– input-process-output (IPO)
– hierarchy plus input-process-output (HIPO)
– logical data flow diagrams (DFD)
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–6


Working Papers
These are the records kept by an auditor
of the procedures and tests applied, the
information obtained, and conclusions
drawn during an audit engagement.
Required by professional standards

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–7

Working Papers
What are some of the systems techniques
used by auditors to document and analyze
the content of working papers?
– internal control questionnaires
– analytic flowcharts
– system flowcharts
– branching and decision tables
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–8


Use of Systems Techniques
in Systems Development
What are the three phases of a
systems development project?
1. Systems analysis
2. Systems design
3. Systems implementation
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–9


Systems Analysis
Much of a systems analyst’s job involves
collecting and organizing facts.
Systems techniques examples:
Interviewing

Observations

Document reviews

Matrix

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

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Systems Design
A blueprint must be formulated
for the complete system.
Input/output (matrix) analysis
Systems flowcharting
Data flow diagrams
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

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Systems Implementation
Systems implementation involves the
actual carrying out of the design plan.
What systems techniques serve
as a documentation tool?
Program flowcharts
Decision tables

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–


Learning Objective 2

Describe the use of flowcharting
techniques in the analysis of
information processing systems.

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–


Systems Techniques
What is a flowchart?
A flowchart is a symbolic diagram
that shows the data flow and
sequence of operations in a system.

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

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Basic Symbols
Input/output
Process

Flowline
Annotation
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

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Specialized Input/Output Symbols
Punched
card
Online
storage
Magnetic
tape

Punched
tape
Magnetic
disk

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

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Specialized Input/Output Symbols
Document
Manual
input

Communication
link
Offline
storage

Display
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

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Specialized Process Symbols
Decision

Auxiliary
operation

Predefined
process

Merge

Preparation

Extract

Manual
operation

Collate

Sort

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

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Additional Symbols
Connector
Off-page
connector
Terminal

Transmittal tape

Parallel mode

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

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Symbol Use in Flowcharting
Symbols are used in a flowchart to
represent the functions of an
information or other type of system.
Normal direction of flow is from
left to right and top to bottom.
Open arrowheads should be used

on reverse-direction flowlines.
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

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Symbol Usage Illustration
Normal Direction of Flow
Invoice

Review
and
approve

Approved
invoice

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–


Symbol Usage Illustration
Reverse Flow Shown with Arrowheads

Approved
invoice

Review
and

approve

Invoice

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–


Symbol Usage Illustration
Use of Connector Symbol
Stores

Purchasing

Approved
invoice

A

Invoice

A
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

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Symbol Usage Illustration
Bidirectional Flow Shown with Arrowheads

Requisition
Prepare
purchase order
and update
vendor files

Vendor
files
Purchase
order

 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–


Learning Objective 3

Define common systems techniques,
such as HIPO charts, systems
flowcharts, and logical
data flow diagrams.
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood

2–