What are the uses of computer assisted auditing techniques CAATs or programs?
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Computer assisted audit techniques (CAATs)There are two broad categories of CAAT:
Audit softwareAudit software is used to interrogate a client's system. It can be either packaged, off-the-shelf software or it can be purpose written to work on a client's system. The main advantage of these programs is that they can be used to scrutinise large volumes of data, which it would be inefficient to do manually. The programs can then present the results so that they can be investigated further. Specific procedures they can perform include:
These procedures can simplify the auditor's task by selecting samples for testing, identifying risk areas and by performing certain substantive procedures. The software does not, however, replace the need for the auditor's own procedures. Test dataTest data involves the auditor submitting 'dummy' data into the client's system to ensure that the system correctly processes it and that it prevents or detects and corrects misstatements. The objective of this is to test the operation of application controls within the system. To be successful test data should include both data with errors built into it and data without errors. Examples of errors include:
Data maybe processed during a normal operational cycle ('live' test data) or during a special run at a point in time outside the normal operational cycle ('dead' test data). Both has their advantages and disadvantages:
Advantages of CAATsCAATs allow the auditor to:
Disadvantages of CAATs
Other techniquesThere are other forms of CAAT that are becoming increasingly common as computer technology develops, although the cost and sophistication involved currently limits their use to the larger accountancy firms with greater resources. These include: Integrated test facilities - this involves the creation of dummy ledgers and records to which test data can be sent. This enables more frequent and efficient test data procedures to be performed live and the information can simply be ignored by the client when printing out their internal records; and Embedded audit software - this requires a purpose written audit program to be embedded into the client's accounting system. The program will be designed to perform certain tasks (similar to audit software) with the advantage that it can be turned on and off at the auditor's wish throughout the accounting year. This will allow the auditor to gather information on certain transactions (perhaps material ones) for later testing and will also identify peculiarities that require attention during the final audit.
What are the uses of CAATs?CAATs are often an efficient means of testing a large number of transactions or controls over large populations by. analyzing and selecting samples from a large volume of transactions; • applying analytical procedures; and • performing substantive procedures.
What is CAAT explain techniques of CAAT?Computer Assisted Audit Techniques or CAATs can be defined as an auditing method that uses computer software tools to query business data to produce reports that will enhance an audit.
What are the audit techniques using computers?Computer assisted audit techniques include two common types. These are test data and audit software. Both of these combined constitute CAATs and their use in audit settings.
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