What are the 5 kinds of computer assisted audit techniques?
Computer-assisted audit techniques
involve using a computer to complete a few tasks when reviewing a client’s financial information. A few popular tools or techniques a computer offers include filter criteria, statistical analysis, aging, and trend analysis. Using a computer during the audit allows multiple individuals access to a client’s information. Professionals use computer-assisted audit techniques to work through larger amounts of financial data quicker than traditional manual reviews or tasks regarding information. Filter
criteria are computer-assisted audit techniques that take large groups of information and data and reduce them to a few samples. Sampling allows auditors to take a small yet representative group of information to test a company’s entire accounting process. Errors in a client’s accounting or financial information can also be discovered with filter criteria. For example, auditors can filter journal entry
transactions for a certain date period or dollar amount. This limits the amount of searching necessary to find needed information. Statistical analyses include ratios and other mathematical measures. Computer-assisted audit techniques often use spreadsheets as a part of this analysis. Auditors can input data into certain spreadsheet cells and allow formulas inherent in the spreadsheet to do their work.
Using this technique, accountants can manually input data into spreadsheets or upload it into the spreadsheet electronically. Large amounts of accounting and financial information can go through this process quickly with computer-assisted audit techniques. Aging is a particular accounting method often found in accounts receivable or
accounts payable departments. Auditors create reports to determine the age for certain pieces of accounting or financial information. For example, auditors group open receivables or payables into 30, 60, 90, or 120 days of age. The reports produced under computer-assisted computer techniques allow auditors to determine how well the company pays its bills and tracks open accounts with customers or vendors,
respectively. Accounting software programs typically have this report built into the system for use by auditors and accountants. Trend analysis is a very common tool in both accounting and auditing environments. Accountants and auditors compare current financial information or data to a previous period and compute the change between the two figures, often months or years apart. Significant growth or decline in the figures can lead to a deeper investigation as the change may be related to
potentially inappropriate reasons. Computer-assisted audit techniques often use this tool as a baseline for audit reviews. Once auditors establish a historical baseline for a company’s growth or decline for accounting information, current figures must be comparable to this number. Relevant to Foundation level Paper FAU and ACCA Qualification Papers F8 and P7 Specific aspects of auditing in a computer-based environmentInformation technology (IT) is integral to modern accounting and management information systems. It is, therefore, imperative that auditors should be fully aware of the impact of IT on the audit of a client’s financial statements, both in the context of how it is used by a client to gather, process and report financial information in its financial statements, and how the auditor can use IT in the process of auditing the financial statements. The purpose of this article is to provide guidance on following aspects of auditing in a computer-based accounting environment:
Exam questions on each of the aspects identified above are often answered to an inadequate standard by a significant number of students – hence the reason for this article. Dealing with application controls and CAATs in turn: APPLICATION CONTROLS Input controls Specific input validation checks may include: Format checks Range checks
Compatibility checks Validity checks Exception checks Sequence checks Control totals Check digit verification Processing controls
Output controls
Master file controls These include:
COMPUTER ASSISTED AUDIT TECHNIQUES (CAATs)
There are three classifications of CAATs – namely:
Dealing with each of the above in turn: Audit software Packaged programs Purpose written programs Enquiry programs Test data Integrated test facilities
Other techniques Other CAATs include: Embedded audit facilities (EAFs) Application program examination Summary Written by a member of the audit exam team What are the various computer assisted audit techniques?In addition to using data analysis software, the auditor uses CAATs throughout the audit for the following activities while performing data analysis:. Creation of electronic work papers. ... . Fraud detection. ... . Analytical tests. ... . Data analysis reports. ... . Continuous monitoring. ... . Curb stoning in surveys.. Which tools are used in CAAT?CAATs Tools and Usage
There are many types of specialized software that can be used to employ CAATs. Some of the most common are Galvanize (formerly known as Audit Command Language or ACL) and IDEA.
What are some audit procedures that can be performed using CAATs?CAATs may be used in performing various auditing procedures, including the following: a. tests of details of transactions and balances, for example, the use of audit software for recalculating interest or the extraction of invoices over a certain value from computer records; b.
What are the 4 methods of auditing?The four types of auditor opinions are:. Unqualified opinion-clean report.. Qualified opinion-qualified report.. Disclaimer of opinion-disclaimer report.. Adverse opinion-adverse audit report.. |