• Having identified the controls that management has put in place it is important to create a documentary record of the internal control system. The following approaches are used in recording the system.
  • Flow charts
  • Narrative descriptions
  • Questionnaires

Flow Charts

These are diagrammatic presentations of the Company’s procedures and processes and are designed to show the movement of documents through the originating and checking function.

Standardised symbols are used to represent the flow of documents and information through the system. This makes understanding easier and eliminates the need for lengthy narratives in explaining the system. Flow charts should be kept simple, so that the overall structure or flow is clear at first sight.

Advantages of using flow charts

  • Easy to prepare
  • Since the information is presented in a standard form, flow charts are easy to follow and review.
  • They generally ensure that the system is recorded in full, all the documents have to be traced from beginning to the end.
  • They eliminate the need for lengthy narratives and can be very effective in highlighting the salient features of internal controls and any weaknesses in the system.


  • They are only suitable for describing standard systems, procedures for dealing with unusual transactions will normally have to be recorded using narrative notes..
  • They are useful for recording the flow of documents but once the records or assets to which they relate have become static they can no longer be used for describing the controls involved. E.g. controls over fixed assets.
  • It is difficult to make major adjustments to the recorded system without the need to re-draw the entire system.