Software Tools Document Internal Control Systems
Ralph E. Viator, Robert A. Deutsch · Journal of accountancy online/Journal of accountancy · 1992
The recent introduction of computer programs that draw flowcharts has made some aspects of CPAs' work easier and more effective. In this article, Ralph E. Viatot, CPA, PhD, an associate accounting professor at the University of Kentucky, Lexington, and Robert A. Deutseh, CPA, PhD, an assistant accounting professor at Marshall University, Huntington, West Virginia, examine five popular flowchart software programs. Flowcharts have many uses in the accounting profession. They can describe complex business structures with organizational charts or workflow procedures in easy-to-understand graphics. In fact, Statement on Auditing Standards no. 55, Consideration of the Internal Control Structure in a Financial Statement Audit, which requires independent auditors to understand a client's internal control systems before planning a financial statement audit, recommends that auditors use such tools as floweharts, questionnaires and decision tables when documenting large, complex systems. Because preparing flowcharts for internal control systems by hand is slow and painstaking, CPAs usually avoided them. However, with the recent introduction of flowchart-drafting software, accountants are using them increasingly. By using pictures to identify the separate internal control elements, viewers can better comprehend the large integrated internal control systems and more easily spot weaknesses in the design and figure ways to correct them. EASE OF USE In most cases, flowchart software is easy to use--much easier than most word processors. After learning a few basic commands, the auditor can quickly produce and print presentation-quality flowchart documentation. The programs make it particularly easy to revise previous drafts, which is helpful when dealing with clients. For example, the auditor can draw a first draft, present the flowchart to the client and quickly modify it after getting feedback. This ease of revision has an obvious advantage for return engagements, when the auditor can access the previous year's internal controls flowchart and update it. Most flowchart programs are menu-driven. The user simply identifies where a symbol should be placed, selects the desired flowcharting symbol from a menu on the screen, enters text describing the specific symbol or function (for example, a purchase order) and then moves on to the next symbol. The number of available symbols in a software product varies from 7 to 35 (for a comparison of software features, see exhibit 1, page 118). …