Reading review problem. The Sarbanes-Oxley Act of 2002 (SOX) was a reaction to the corpora...

Reading review problem. The Sarbanes-Oxley Act of 2002 (SOX) was a reaction to the corporate accounting scandals of the late 20th century. In discussing some of the positive results of SOX, Harrington stated:

Companies can find additional uses for Sarbanes-Oxley documentation as a tool for audit committees, a way to enhance employee decisions based on cross-function process information and a means of increasing efficiencies by eliminating duplicate controls. Alltel Corporation ( www.alltel.com ) documented 100 company processes within the scope of [SOX]. Alltel’s internal audit team reports to the company’s audit committee. Its process documentation includes six flowcharts per process, supported by memos and narratives. The audit committee can use this information to support its decisions.

She concluded her article with these summary comments:

CPAs can use the documentation to provide audit committees with more detailed information, to empower all employees to consider cross-functional processes and to lead the entire company in using section-404-type documentation. Since there is no way to avoid the cost, companies might just as well find ways to spread the expenditures over this greater array of benefits.

So, flowcharts aren’t just something you study in AIS class. In fact, in a survey conducted by Bradford, Richtermeyer, and Roberts, nearly half of the respondents reported using flowcharts to document accounting information systems.

Sources: Cynthia Harrington, “The Value Proposition,” Journal of Accountancy (September 2005), pp. 77–81; Marianne Bradford, Sandra B. Richtermeyer, and Douglas F. Roberts, “System Diagramming Techniques: An Analysis of Methods Used in Accounting Education and Practice,” Journal of Information Systems (Spring 2007), pp. 173–212.

a. Which type(s) of flowcharts discussed in the chapter would be relevant in this case? Explain your response.

---

b. SOX imposes serious requirements regarding internal control on publicly-traded corporations. Those requirements include the CEO and CFO personally reviewing the company’s internal control system, identifying weaknesses and known cases of fraud. Suppose you were creating a systems flowchart depicting a typical SOX process; identify three or four symbols you would expect to use in that flowchart, and explain how you would use them.