Page 142 - DCOM509_ADVANCED_AUDITING

Unit 8: Auditing in Computerized Environment

8.4.1 Advantages of using GAS Notes

The open standards in hardware and software make hardware and software, compatible with
each other. Due to this, new versions, new products and new brands are coming to the market
very fast. The rate at which new products and versions are launched, make it difficult for an
individual to keep track of these changes. This is especially true for an external auditor. External
auditor has to audit various clients each using different hardware, software, and database and
application software. Even the same client may be using different version of operating systems,
database and application software. No one can learn so many Embedded Audit Modules (even
if there is one) and utility software. With the use of GAS, auditing becomes independent of
application, database and operating system.

General Audit Software (GAS), however, has certain limitations in as much as that:
 It can undertake only ex-post auditing and not concurrent auditing i.e. it enables evidence
to be collected only on an application system after the fact, when the data has already been
processed. As such, situations where the time lag between occurrence of an error in
application system and its possible identification using GAS are critical (for example
where multiple users access a shared database) auditors must use specialized rather than
GAS.
 GAS has limited ability to verify processing logic of an application system. To overcome
this problem, test data must be designed specifically to determine how application system
handles exceptional conditions.

 GAS has limited ability to determine propensity of error. Auditors are concerned with
whether application systems have been designed appropriately to accommodate change;
otherwise errors are likely to result when changes to the system must be undertaken.
Unfortunately, auditors can obtain little evidence using GAS on application system’s
capability to accommodate change. Instead, evidence must be obtained in different ways.

Example: Reviewing management control framework, examining ways application
systems are designed and program codes are written.

8.4.2 Other Auditing Software

 Some types of audit software packages have been developed for specific use in financial,
insurance and health services. Although these packages are generalized, they are oriented
towards a particular industry and provide commands that invoke common audit functions
needed within that industry. One such package is CAPS package developed by Brisbane
based Kendall Chartered Accountants. This package provides for loan arrears audit, interest
audit, term deposit interest audit, ledger balances and transactions audit, dormancy audit
and legislative compliance audit. Advantages of such audit software over GAS are that
they run efficiently and are easier to use by the auditors within the specific industry.
However, more limited domain is also disadvantageous to that extent.
 Similarly an organization dealing with uniform operating and database management
systems and application packages can also develop in-house packages or programmes,
which may answer standard audit queries, generate pre-designed statements and exception
reports. However, for each new query, a new programme may have to be developed. Such
embedded audit software is very easy to use and serve good purpose for internal auditing
where auditors have to audit the same system again and again.

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