Explain the techniques and tools for internal audit when accounts are maintained by computers
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Computer Assisted Audit Techniques (CAATs)
The nature of computer-based accounting systems is such that auditors may use the audit client company’s computer, or their own, as an audit tool, to assist them in their audit procedures. The extent to which an auditor may choose between using CAATs and manual techniques on a specific audit engagement depends on the following factors:
the practicality of carrying out manual testingthe cost effectiveness of using CAATsthe availability of audit timethe availability of the audit client’s computer facilitythe level of audit experience and expertise in using a specified CAATthe level of CAATs carried out by the audit client’s internal audit function and the extent to which the extern al auditor can rely on this work.
There are three classifications of CAATs – namely:
Audit softwareTest dataOther techniques
Dealing with each of the above in turn:
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