Drawing a Map of the Business

Gaining a solid understanding of business processes is fundamental for all professional accounting tasks and is crucial to understanding a business. Whether the purpose is to identify internal control risks, design systems, or document processes, organizations look to internal auditors for comprehensive understanding. Understanding business processes is also essential for implementing enterprise resource planning (ERP) systems to assist with Sarbanes-Oxley compliance as well as for identifying event risks and controls. The visual representation provided by flowcharts can summarize pages of narrative in a single drawing. However, the amount of detail included in flowcharts can make process analysis and associated risk and control identification difficult. An alternative method internal auditors can use to document controls and communicate them to clients is Uniform Modeling Language (UML) diagramming. UML diagrams are easier to understand than flowcharts. Section 404 of Sarbanes-Oxley focuses on information used to produce financial statements and internal financial controls. As part of their compliance efforts, many companies use detailed narratives to document business processes.