Running head: INTERNAL CONTROL STRUCTURE 1

Internal Control Structure

Author

Institute
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Introduction

Any system contains internal control structures that govern how processes, inputs, and

outputs interact with business processes. Data flow diagrams and flow charts are tools that

illustrate how the system works by representing these inputs, outputs, and interactions with

processes using symbols. Accounting organizations use data flow diagrams to explain the inner

workings of their systems and processes, making these diagrams a vital part of the accounting

system. These organizations use data flow symbols to represent the flow of data, data processing,

and the visualization of this data (ConceptDraw). This paper discusses the use of these symbols

in flow charts, their significance, and their benefits to the accounting system.

Data Flow Diagrams and Symbols

Accountants use various methods to illustrate how data moves within an organization.

One of these methods is the use of flow charts and data flow diagrams. A data flow diagram

(DFD) includes data stores, inputs, outputs, and various sub-processes within the process

(LucidChart). These elements are represented in DFDs using standard symbols and notations and

their relationships described using connections. It is often very challenging to describe the

operations described in a DFD using plain text (LucidChart). A DFD makes it more

straightforward to visualize the processes in the system and map out changes and identify

inefficiencies. This information would not be as clear if the system were in a plain text

document.

The symbols used in DFDs are standard in all accounting systems. Each symbol

represents either a process, data store, external entity, or data flow (LucidChart). Circles or ovals

depict processes that transform data in the system (AIA). Processes may receive data, produce
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data, or perform some other action based on the data (ConceptDraw). All processes in a DFD

need to have inputs and outputs since they are the main points of the transformation of data in the

system. The circle's label is the name of the primary function executing the process, and the

symbols are typically arranged from top to bottom or left to right in a DFD (LucidChart). In

some variations of the DFD, a rectangle with rounded edges represents a process.

External entities, also referred to as actors, terminators, sources, or sinks, are data

consumers and producers in the DFD (LucidChart). They are the external sources of data or the

foreign consumers of the data flowing inside the system. Since they interact with the operation

represented by the DFD from an external standpoint, they appear on the edges of the DFD

(LucidChart). External entities are represented using rectangles in a data flow diagram

(ConceptDraw). All these foreign entities contributing to a change in state in the system should

appear as rectangle symbols in a DFD.

Datastores represent repositories of data that do not modify the data but hold it for later

access (LucidChart). These symbols, represented by two horizontal lines or an unclosed

rectangle, represent the bases of data participating in the process (ConceptDraw). These data

stores may consist of files stored for an extended period for use in the process of file batches held

temporarily while the process transforms the data. The data retrieved from the stores is known as

output flows (LucidChart). Datastores are, therefore, both the temporary and permanent

repositories of data taking part in a process.

The last symbol is the arrow, which represents the flow of data within the system. The

direction of flow follows the arrow's direction, indicating the source to the destination

(ConceptDraw). Data flows connect the data stores, external entities, and processes, showing the

movement of data through each stage in the process represented by the DFD (LucidChart). This
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visual representation of processes helps accountants and organization directors understand the

inner working of their system better. Overlaps in functions are directly visible, and redundancies

eliminated just by looking at a DFD. Modifications and adjustments only require adding any of

the elements represented by the symbols, making the system more efficient and reliable.
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References

AIA. (2019). A Quick Look at… Documentation Techniques for Accountants: Data Flow

Diagrams | Association of International Accountants. Retrieved 23 December 2019, from

https://www.aiaworldwide.com/international-accountant/editors-blog/quick-look-

%E2%80%A6-documentation-techniques-accountants-data-flow.

ConceptDraw. (2019). Accounting Flowchart Symbols. Retrieved 23 December 2019, from

https://www.conceptdraw.com/How-To-Guide/accounting-flowchart-symbols.

Lucidchart. (2019). Data Flow Diagram Symbols. Retrieved 23 December 2019, from

https://www.lucidchart.com/pages/data-flow-diagram/data-flow-diagram-symbols.