SYSTEM FLOWCHART

 Simplest definition: A SYSTEM FLOWCHART DEPICTS THE RELATIONSHIP AMONG THE INPUTS,
PROCESSES, AND OUTPUTS OF AN AIS. (Romney & Steinbart, 2008)
 These flowcharts depict an electronic job stream of data through processing phases of an AIS,
and therefore illustrate audit trails (Simkin, Strand Norman, & Rose, Core Concepts of
Accounting Information Systems, 2014)
 Is the graphical representation of the physical relationships among key elements of a system.
These elements may include organizational departments, manual activities, computer programs,
hard-copy accounting records and digital records (Hall, 2011)

TWO TYPES OF SYSTEM FLOWCHARTS (Hall, 2011)

1. Flowcharting Manual Procedures

2. Flowcharting Computer Processes

CONSTRUCTING A SYSTEM FLOW CHART

 FLOWCHART SYMBOLS
- Three standardizing bodies
1. National Bureau of
Standards
2. International
Organization for
Standardization (ISO)
3. American National
Standards Institute
(ANSI)
- Four symbol groups
1. Basic
2. Input/output
3. Processing
4. Additional symbols
- Differ depending on what activities you will be flowcharting
(to be discussed in further slides)
 RULES ON PROPER CONSTRUCTION
a. Top to bottom, left to right
b. Use the standardized symbols
c. Use the symbols correctly
d. Label all symbols properly
e. Use the sandwich rule
f. Line must always have arrowheads
g. Use on-page and off-page connectors to avoid crossed lines
h. Sketch before final draft
i. Add descriptions and comments for explanation
 STEPS ON CONSTRUCTING YOUR SYSTEM FLOWCHART
 a. Determine what you need to flowchart.
b. Gather information through direct communication with the people involved.
c. Create an unambiguous outline of the information, arranged logically and in order.
d. Determine the physical areas of activity and write them down.
e. Transcribe the written facts into visual format using standardized elements
 Identify the inputs to the system
- New data
- Data stored for future use
- Both
 Determine the process that immediately follows the input
 Determine the output, or the resulting new information from processing
- Stored for future use
- Displayed on a screen
- Printed on paper
- An input to the next process
f. Connect each area of activity using connector lines. To prevent crisscrossing, use
different on-page and off-page connector lines.

EXAMPLE OF FLOWCHARTING MANUAL PROCEDURES

1. Determine what you need to flowchart.

An auditor needs to flowchart a sales order system to evaluate its internal controls and
procedures.
2. Gather information through direct communication with the people involved.
The auditor will begin by interviewing individuals involved in the sales order process to
determine what they do.
3. Create an unambiguous outline of the information, arranged logically and in order.

4. Determine the physical areas of activity and write them down.

There are four distinct areas of activity: sales department, credit department,
warehouse, and shipping department.
5. Transcribe the written facts into visual format using standardized elements.
6. Connect each area of activity using connector lines. To prevent crisscrossing, use different on-
page and off-page connector lines.
EXAMPLE OF FLOWCHARTING COMPUTER PROCESSES

Follow the same steps as above