Systems Techniques
and Documentation
Chapter 2
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Symbol Usage Illustration
Use of Connector Symbol
Stores
Purchasing
Approved
invoice
A
Invoice
A
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Symbol Usage Illustration
Bidirectional Flow Shown with Arrowheads
Requisition
Prepare
purchase order
and update
vendor files
Vendor
files
Purchase
order
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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
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IPO and HIPO Charts
These charts are used primarily by
systems development personnel.
At the most general level of analysis,
only the basic input-process-output
relations in a system are of concern.
Additional processing detail is provided
by hierarchy plus input-process-output.
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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IPO Chart
System: Payroll
Author: Mr. Foxx Description: Calculate
Gross Pay
Chart Number: 3.1
Date: 6/9/0X
Input
Process
Output
Payroll job record Accumulate hours
Gross pay records
Payroll master file
worked
Payroll master file
Find correct pay rate Error messages
Compute gross pay
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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HIPO Illustration
1.0
Payroll system
2.0
Data preparation
3.0
4.0
Processing
Review
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HIPO Illustration
3.1
3.2
Calculate
gross pay
Calculate
net pay
3.11
Accumulate
hours worked
3.12
Find correct
pay rate
3.13
Compute
gross pay
Each numbered module would be detailed in an IPO chart.
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Systems and Program Flowcharts
A systems flowchart identifies the overall
or broad flow of operations in a system.
A program flowchart (block flowchart)
is more detailed concerning
individual processing functions.
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Logical Data Flow
Diagram Symbols
Name
Symbol
Meaning
Terminator
Represents sources and
destinations of data
Process
Task or function
being done
Data store
A repository of data
Data flow
Communication
channel
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Data Flow Diagram
Timekeeping
Payroll
data
Process
payroll
data
Payroll
data
Paychecks
Employees
Payroll
details
Payroll Data
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Data Flow Diagram Expanded
Current
status
Timekeeping
Payroll
data
Employee
data
Verify
payroll
data
P1
Data
valid
Valid
payroll data
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Data Flow Diagram Expanded
Employee
data
Net pay and
deductions
Data to
process
Calculate Paychecks
pay
Employees
P2
Valid
payroll data
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Data Flow Diagram
Expanded Further
Update
employee
files
Current
amounts
Process
payroll
journal
Details
Journal
data
Net pay and
deductions
Compute
net pay
Paychecks
Employees
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Analytic, Document, and Forms
Distribution Flowcharts
An analytic flowchart is similar
to a systems flowchart in level
of detail and technique.
A document flowchart is similar to an
analytic flowchart but contains less
detail about the processing functions
of each entity shown on the chart.
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Analytic, Document, and Forms
Distribution Flowcharts
The forms distribution chart illustrates
the distribution of multiple copy
forms with an organization.
Purchase
Receive
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Analytic Flowchart
Purchasing
Approve
vendor
list
Suppliers
Select
vendors
Prepare
quotation
requests
Requests
for
quotation
Requests
for
quotation
Quotations
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Analytic Flowchart
Purchasing
Suppliers
Quotations
Select
bid
Quotations
Prepare
purchase
order
Purchase
order
Purchase
order
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Document Flowchart
Controller
Accounts
Payable
Purchase
requisition
2
To Vendor
Purchase
order
5
Vice President Manufacturing
Purchasing Agent
Receiving
Purchase
requisition
1
Stores
Purchase
requisition
1
2
Purchase
order
1
Purchase
order
3
2
3
4
Purchase
order
4
5
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Forms Distribution Chart
Purchasing
Purchase
order copy
Inventory
1
1
2
Payables
Production Accounting
1
2
2
3
4
3
4
5
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Analytical Flowcharting Illustration
Symbol selection
System analysis
Drawing the flowchart
Sandwich rule
Use of connector symbol
Entity-column relations
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Narrative Techniques
Narrative techniques are useful in the
fact-finding stage of system analysis.
What are some examples of narrative techniques?
Open-ended and closed-ended questionnaires
Document reviews
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Resource Utilization Analysis
Work measurement involves four basic steps.
1. Identify the tasks.
2. Obtain time estimates for performing the tasks.
3. Adjust these time estimates.
4. Analyze requirements based on these data.
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Resource Utilization Analysis
(Average time/unit + Idle time/unit)
× Average volume = Total task time
Total time available ÷ Total task time
= Capacity utilization
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Decision Analysis Techniques
Decision to be made
Conditions that can occur
Path to be followed for each condition
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Branching Table Format
Code
equal to
Go to
1
2
3
4
Inconnector Inconnector
reference
reference
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Decision Table Format
Table Title
Rules
1
Condition stub
If:
Then: Action stub
2
3
…
N
Condition entry
Action entry
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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Decision Table for
Processing Labor Distribution
If
Then
Line
1
2
3
10
11
12
13
14
Condition action Rule 
15 Regular hours
15 Overtime hours
15 Shift bonus hours
1
Y
Y
Y
2
–
–
N
3
–
N
Y
4
–
–
N
5
N
Y
Y
6
7
8
–
N
N
Y
N
Regular dollars
× × × ×
Overtime dollars
× ×
Shift dollars
×
×
Error no shift or OT
× × ×
Nest record
× × × × × × ×
Go to – F (Function); R (Rule, same table); T (Table)
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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End of Chapter 2
 2004 Prentice Hall Business Publishing, Accounting Information Systems, 9/e, by Bodnar/Hopwood
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