Evaluate the value of a data flow diagram and the system flowchart, making a determination as to which is the most effective in identifying what person or department is responsible for a particular task. Justify your answer.
Documentation is as important in the accounting world as recording transactions. Documentation skills are also critical for accountants to master. There are five basic documentation techniques that accountants use, as follows:
Data flow diagrams
Entity relationship diagrams
Program flowcharts, and
Record layout diagrams
Data flow diagrams represent a graphical flow of data through the information system. They represent the entities, processes, data flows, and data stores that pertain to the system. Data flow
diagrams demonstrate what tasks are being performed, but not who or how they are being performed.
Security and control reasons, system flowcharts, logic flowcharts, and programcode listings should not be part of the operator documentation. ( Systems Development and Program Change Activities)
Data Usage Analysis
Another technique is based on data usage analysis. The Data Flow Diagram (DFD) is a popular model since it was first proposed, in the 70s. There are many objections to using it in the workflow context. ( Data-Flow Modeling: A Survey of Issues and Approaches page 117)
The DFD emerged from the management information system (MIS) field and is used to depict a system’s processes, data flows among the processes, and sources, destinations, and storage of data ( System Diagramming Techniques: An Analysis of Methods Used in Accounting Education and Practice page 174 )
System flowcharts, program flowcharts, and program code listings are important forms of documentation. Thesystem flowchart shows the relationship of input files, programs, and output files. However,
it does not reveal the logic of individual programs that constitute the system. The programflowchart provides a detailed description of the sequential and logical operation of the program. (Information Technology Auditing and Assurance, Third Edition James A. Hall; 2011 Cengage Learning, Inc; page 199)
System flow chart are most effective to identfying what person or department is responsible to a particular task.
Compare two legacy systems to modern databases and assess how the improvements impact data integrity. Provide examples of audit issues that were inherent in those legacy systems
Legacy Systems versus Modern Systems
Not all modern organizations use entirely modern information systems. Some firms employ legacy systems for certain aspects of their data processing. When legacy systems are used to process financially significant transactions, auditors need to know how to evaluate and test them. Legacy systems tend to have the following distinguishing features: they are mainframe-based applications; they tend to be batch oriented; early legacy systems use flat files for data storage, but hierarchical and network databases are often associated with later-era legacy systems. These highly structured and inflexible storage systems are very efficient data processing tools, but promote a single-user environment that discourages information integration within business organizations. Modern systems tend to be client-server (network)–based and process transactions in real time. Although this is the trend in most organizations, please note that many
modern systems are mainframe-based and use batch processing. Unlike their predecessors, modern systems store transactions and master files in relational database tables.
A major advantage of database storage is the degree of process integration and data sharing that can be achieved. ( Information Technology Auditing and Assurance, Third Edition James A. Hall; 2011 Cengage Learning, Inc page 253)
Information Technology Auditing and Assurance, Third Edition James A. Hall; 2011 Cengage Learning, Inc; Systems Development and Program Change Activities; http://www.coursesmart.com/9781439079119/firstsection#X2ludGVybmFsX0J2ZGVwRmxhc2hSZWFkZXI/eG1saWQ9OTc4MTQzOTA3OTExOS8xODI