NCJ Number
70305
Journal
US Army Audit Agency Bulletin Dated: (Winter 1965) Pages: 11-18,20-21
Date Published
1965
Length
11 pages
Annotation
A flow chart, particularly a structural rather than a technique flow chart, is a useful tool for both the auditor and the management advisory services consultant in analyzing systems, developing improvements, and writing procedures.
Abstract
In the electronic data processing field, technique flow charts illustrate the information requirements in a system and how they are to be met, while structural flow charts show kinds of input, origin, quantities, the flow through processing, the files maintained, and the output. Structural flow charts can be used both to review the actual operation of the system of internal control by tracing the documentation and as a systematic approach to gathering the facts prerequisite to developing improvements in systems or procedures. In reviewing internal control a properly constructed flow chart can illustrate the organizational features separating the functions of operations, custody, and accounting; indicate the personnel who discharge the responsibilities of each function; and reveal the documentation supporting the actions taken. The management advisory services consultant finds flow charting important in gathering and analyzing the facts, considering the alternatives, developing recommendations, and implementing changes. The flow chart uses somewhat standardized symbols to trace the flow of paperwork (and information the documents contain) it represents. With the symbols the system of flow charting shows each document on a separate horizontal line indicating every action affecting that document from the point where it was introduced into the system to its final disposition. Moreover, the flow chart must illustrate the pertinent facts in a logical manner. Thus, the flow chart brings into focus the distribution of duties and responsibilities within an organization; the identity of offices that authorize, consummate, or account for transactions; measures in force to secure assets; and records maintained to ensure accuracy and reliability of accounting data. Consultants and accountants can work together with the use of such charts. The symbols used in flowcharting, an example of a situation for which a flow chart was used, and examples of flowcharts are provided. For related documents, see NCJ 70301-04.