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Unit 8: Auditing in Computerized Environment
All the concurrent audit techniques described above have their benefits as well as limitations. Notes
When auditors implement these techniques, all the necessary decisions (including those relating
to expertise available in the organization) regarding software or application will have to be
taken as are taken in normal circumstances. They have also to seek the support of the groups
affected by concurrent auditing. Concurrent audit techniques have the advantages of being
viable alternative to ex-post auditing and auditing around computer; and surprise test capability.
Self Assessment
Fill in the blanks:
9. ………………….auditors use General Audit Software like ACL or IDEA or high-level
languages like Structured Query Language (SQL) and industry specific or embedded audit
software tools.
10. Quality of data reflects the quality of ………………………… who developed the system.
11. General Audit Software (Gas) has limited ability to verify ………………………….. Logic
of an application system.
8.5 Computer Assisted Audit Techniques and Tools (CAATTs)
Computers can be used by auditors in many more ways, other than just processing of transaction
or data files using Audit Software. One of the ways to use computers is using General Audit
Software, which has already been described in detail above. Let us discuss some of the other
ways in which Computers can be used.
8.5.1 Electronic Work Papers
The ability to search for information in text, databases, or other audit records is enabling auditors
to coordinate their efforts and examine findings from prior or concurrent audits. Requiring
standardized audit forms and formats can improve both the quality and consistency of audit
work papers. The management of current and archived work papers in a centralized audit file or
database assists audit management in coordinating concurrent audits, assuring they consider
findings from prior or related projects. Expert systems provide an opportunity to add broad
support and increased functionality to audit work paper tools. To illustrate, an expert system
may evaluate responses to a questionnaire and automatically generate links to additional related
questions. Expert systems may also look at patterns in information, findings, recommendations
of related concurrent or previous audits, and provide reports indicating potential related or
systemic problem areas.
8.5.2 Information Retrieval and Analysis
Historically auditors have relied on samples of transactions to perform their tests. Now, with
the use of automated retrieval and analysis tools, it is usually easier to assess all records than to
evaluate a sample. Furthermore, auditors can set parameters in their software to identify all
records meeting selection criteria. Full selection of known error type records can eliminate the
problem of estimating error rates. Instead, error analysis can focus on those records whose data
are outside the range of expected transaction values, but still within the limitations of defined
error conditions. Actual sampling techniques may be applied at the time records are selected
from the production system, or all records of a given type may be selected and sampling or
more detailed selection may be applied in the analysis process.
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