What is documentation 1/3 -explaining system operations
Documentation explains how a system works, including the who, what, when, where, why, and how of data entry, data processing, data storage, information output, and system controls.
What is documentation 2/3 - Methods of preparation
- Diagrams and flowcharts: Visual representations illustrating system
components, processes, data flow, and interactions in a graphical format. - Tables and charts: organized data structures presenting information concisely and logically.
- Narrative descriptions: Written explanations in prose form, offering step-by-step details and explanations of system components, their functionalities, and their
interconnections.
What is documentation 3/3 - Importance of documentation tools
- Reading documentation: Users, auditors, or stakeholders need to read documentation to gain a clear understanding of system operations and functionalities.
- Evaluating Documentation: Assessment of documentation helps identify strengths, weaknesses, and areas for improvement in system controls. It assists in aligning new systems with company requirements.
- Creating Documentation: Generating comprehensive documentation that effectively illustrates system functions demands a higher level of expertise and skill.
Business Process diagrams (BPD)
Examples of business process that can be represented on a BPD: The revenue and expenditure
cycles, featuring multiple activities:
- Activities in a revenue cycle:
- receiving an order,
- checking customer credit,
- verifying inventory availability, and
- confirming customer order acceptance.
- Activities in an expenditure cycle:
- shipping the goods ordered,
- billing the customer, and
- collecting customer payments.
- A BPD would visually represent
these activities in a sequential manner, showing the organizational units (or departments) involved in the process.
BPD 5 categories of symbols
- Events
An event triggers, interrupts, or ends a process. They are represented by circles. - Activities
Are actions performed and are represented by a rounded rectangle.
They typically start with an action verb such as generate, process, etc. - Gateway
Gateways are used for merging process flows. Gateways shown as diamond shapes represent decisions or possible outcomes of an activity. - Data
Data Flows- represented by lines and arrows and show how data
moves from process to process.
Data object- can be document or data record. They are represented by a rectangle with one corner folded.
Data store- is where data is stored. It is represented by a cylinder typically used to represent a database. - Swimlanes (pools)
Swimlanes and pools are rectangles used to represent groups and
organize activities in a BPMN diagram. Like a swimming pool, the BPMN pool can contain swimlanes.
Swimlanes are used to organize activities based on functions and roles.
Data flow diagram (DFD)
A Data Flow Diagram (DFD) is a visual representation used to illustrate the flow of data within a system or a specific process, or an organisation.
DFD provides a structured and clear depiction of how data moves through different stages and components of a system.
DFD elements
- The square box represents where the data is coming from (source) and where it ends (destination).
- The arrows show the directional flow of data from one source to a transformative process, data store, or data destination.
- The circle shows a transformative process.
- The two horizontal lines represent data storage.
- A triangle is used in a DFD which would identify controls associated with the process.
Flowcharts
A flowchart is a pictorial, analytical technique used to describe some aspect of an information system in
a clear, concise, and logical manner.
* Uses of flowcharts:
To record how business processes are performed and how documents flow through the organization.
Revenue Cycle
involves recurring business
activities and information processing linked to selling goods and/or services to customers and receiving payments.
Revenue cycle primary objective
Revenues (sales) are the primary driver of organizations’ activities, and the most intensive customer contact point.
It consists of all events involved in the exchange of goods and services with customers and thus excellent customer service must always be provided to help an organisation achieve its revenue target.
The RC aims to deliver the right product at the appropriate time and place, meeting the price
requirements.
Expenditure Cycle
involves recurring business activities and information processing linked to purchasing goods/services and making payments. See context diagram
RC stages in order
- Sales order entry
- Shipping
- Billing
- Cash collections
Expenditure Cycle primary objective
minimize the total cost of acquiring and maintaining inventories, supplies, and the various services the organization needs to function.
EC stages in order
- Ordering Materials, Supplies, and Services
- Receiving materials, supplies, and services.
- Approving supplier invoices.
- Cash disbursements.
(RC) Sales order entry :threats and controls
1T. Incomplete or inaccurate customer orders’
1C. Data entry edit controls (check completeness of data)
2T. Invalid Orders
2C. Digital or written signature to authorize sale.
(RC) Shipping :threats and controls
1T. Picking wrong item or quantity to ship
1C. Reconcile picking list to sales order
2T. Theft of Inventory
2C. Restrict physical access to inventory.
(RC) Billing :threats and controls
1T. Failure to Bill Customers
1C. Separate shipping and billing functions
2T. Billing errors
2C. Configure system to automatically enter price
data.
(RC) Cash collections :threats and controls
1T. Theft of cash
1C. handling of money within the organization should be minimized
2T. Cashflow problems
2C. Discounts for early payment
(EC) Ordering Materials, Supplies, and Services :threats and controls
1T. Stockouts and excess inventory
1C. periodic physical counts
2T. Purchasing items not needed
2C. Review and approval of purchase requisitions
(EC) Receiving materials, supplies, and services :threats and controls
1T. Accepting unordered items
1C. Authorize purchase orders needed before
receiving goods
2T. Mistakes in counting received goods
2C. Receiving employees sign receiving report
(EC) Approving supplier invoices :threats and controls
1T. Failing to spot errors in supplier invoice
1C. Verify invoice accuracy
2T. Mistakes in posting to accounts payable
2C. Data entry edit controls
(EC) Cash dispursements :threats and controls
1T. Pay for items not received
1C. Pay only original invoices
2T. Duplicate payments
2C. Separation of duties
