Page 162 - DCOM204_AUDITING_THEORY

Auditing Theory

Notes utilization – amount of overtime, labour charged to jobs in excess of standards, and
downtime. Comparisons can be made with prior performance as well as with standards to
indicate performance needing improvement. In addition, the programs can identify new
and terminated employees, as well as changes, for checking against payroll authorization
file in the personnel department.

3. Maintenance: Overruns in excess of specified percentage can be pin pointed for analysis of
causes. Backlogs of maintenance request can be aged and printed out for review.
4. Energy: Plants or departments with excessive use of gas and electricity are identified for
monitoring under the energy program.
5. Travel and Telephone: Excessive chores by employee or departments can be identified for
follow up and possible reductions.
6. Sales: Data can be accumulated as to sales by salesperson, territory, or product in relation
to quotas and performance by others.
Self Assessment

Fill in the blanks:
5. The extended use of computers by companies of all size has stimulated changes in the
.......................... approach.

6. Prior to selecting a computer audit package, a review should be made of the generalized
computer audit program systems that have been .......................... by other organizations.

8.9 Computer assisted Audit Techniques (CAATs)

An auditor uses various Computer assisted Audit Techniques to carry out audit procedures
while auditing through the computer. Under CIS environment, the auditing cannot be carried
effectively using traditional/conventional and manual techniques of auditing. The auditing
through the computer requires the use of various audit software packages and some computer-
assisted audit techniques.
8.9.1 Audit Software

The use of CAAT allows the auditor to test the reliability and credibility of the clients’ information
system, without being much dependent upon the clients’ software. Now-a-days, there are a
plenty of audit software options available with the auditor, with the help of which he can
perform his audit independently and effectively. This audit software may include package
programs, purpose-written programs, utility programs or system management program. These
programs are explained as follows:
1. Package Programs:

(a) These are generalized computer software packages.
(b) These packages come with a lot of generalized features and utilities, which can be
used at many clients’ site.

(c) Since these software packages are highly generalized and are available across the
globe, so one does not face any compatibility issues. Almost all the organization
maintains certain level of compatibility with these programs.

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