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SYSTEMS DEVELOPMENT AND DOCUMENTATION TECHNIQUES

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Title: SYSTEMS DEVELOPMENT AND DOCUMENTATION TECHNIQUES

SAS-94 requires that auditors understand the
automated and manual procedures an entity uses.
SOX requires that publicly-traded corporations
and their auditors document and test the
companys internal controls.
Auditing Standard No. 2 requires that the
external auditor express an opinion on the
clients system of internal controls.

CAST Manual Module Purchases
As raw materials are needed for production and
bottling, Production sends a purchase requisition
to Purchasing where a prenumbered purchase order
is completed in quadruplicate.
The purchase order must be approved and signed by
a purchasing supervisor. Copy 1 of the purchase
order is sent to the supplier. Copy 2 of the
purchase order is sent to Accounting. Copy 3 of
the purchase order is sent to Receiving. Copy 4
of the purchase order and the purchase
requisition are held temporarily in Purchasing.
As goods are received from suppliers, they are
inspected, counted and compared to copy 3 of the
purchase order. A prenumbered receiving report
is prepared in triplicate. Copy 3 of the
receiving report and copy 3 of the purchase order
are filed numerically. Copy 2 of the receiving
report is sent to Purchasing where it is matched
with copy 4 of the purchase order and the
purchase requisition and filed numerically.

Definition a tool used to depict a part of an
information system in a clear, concise, and
logical manner
Types
Document flowchart - depicts flow of documents
information between areas of responsibility
within an organization
Computer system flowchart depicts how data are
captured input into the system, the processing
performed on the data, and the information output
by the AIS
Program flowchart indicates the sequence of
logical operations performed by the computer when
executing a program

CAST Manual Module Purchases
As raw materials are needed for production and
bottling, Production sends a purchase requisition
to Purchasing where a prenumbered purchase order
is completed in quadruplicate.
The purchase order must be approved and signed by
a purchasing supervisor. Copy 1 of the purchase
order is sent to the supplier. Copy 2 of the
purchase order is sent to Accounting. Copy 3 of
the purchase order is sent to Receiving. Copy 4
of the purchase order and the purchase
requisition are held temporarily in Purchasing.
As goods are received from suppliers, they are
inspected, counted and compared to copy 3 of the
purchase order. A prenumbered receiving report
is prepared in triplicate. Copy 3 of the
receiving report and copy 3 of the purchase order
are filed numerically. Copy 2 of the receiving
report is sent to Purchasing where it is matched
with copy 4 of the purchase order and the
purchase requisition and filed numerically.

Each page of each DFD or Flowchart MUST be
numbered and have a proper heading which
includes
the company name
title of the diagram
date prepared
preparers name

A system flowchart depicts the relationship among
the inputs, processes, and outputs of an AIS.
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 outputsthe resulting
new information.
In other words, its the same basic input
process output pattern that we saw in the
document flowchart.

Program flowcharts illustrate the sequence of
logical operations performed by a computer in
executing a program.
They also follow an input process output
pattern.

DFDs emphasize the flow of data and what is
happening in a system, whereas a flowchart
emphasizes the flow of documents or records
containing data.
A DFD represents the logical flow of data,
whereas a flowchart represents the physical flow
of data.

Flowcharts are used primarily to document
existing systems and are concerned with the
physical aspects of the input, processing and
storage of the data.
DFDs, in contrast, are primarily used in the
design of new systems and do not concern
themselves with the physical devices used to
process, store, and transform data.

We have
Prepared two types of graphical forms of
documentation
Data flow diagrams
Flowcharts
Discussed the importance of these tools to
accountants and when they are employed
Discussed the basic guidelines for creating data
flow diagrams and flowcharts