Chapter Eight

1
Chapter Eight

• Using Computer Assisted Audit Tools and
  Techniques (CAATTs)

2
Two Categories of CAATTs

• 1) Computer Assisted Audit Tools
• 2) Computer Assisted Audit Techniques

3
Computer Assisted Audit Tools

• Productivity Tools
• Generalized Audit Software Tools

4
Productivity Tools

• Include
• E-workpapers
• Groupware
• Time and billing software
• Reference libraries
• Document management

5
Generalized Audit Software Tools

• Include
• ACL
• Audit expert systems
• Utility and statistical software

6
ACL

• Widely used for data extraction and analysis
• Allows for virtual 100 testing of client data

7
Computer Assisted Audit Techniques

• CAATs to Validate Audit Techniques
• Test desks
• Integrated test facility
• Parallel simulation
• CAATs to Verify Data Integrity
• Data extraction and analysis
• Fraud detection
• Continuous auditing techniques

8
10 Steps to Using CAATs

• 1. Set key audit objectives
• 2. Identify CAATs to be used
• 3. Identify which data files are needed
• 4. Determine which format you need
• 5. Request files from client in preferred format
• 6. Import data into ACL

9
10 Steps (Cont)

• 7. Use CAATs to verify the data import process
• 8. Perform other CAATs
• 9. Investigate and reconcile exceptions
• 10. Document results in workpapers

10
CAATs to Detect Fraud

• Digital analysis
• Benfords Law for a series of naturally occurring
  numbers
• Deals with expected frequency of first digits
• Exponential distribution
• Requires large sample size