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Research on CAATTs
Introduction
Computer Assisted Audit Tool is the tool used by the auditors in assisting
them in conducting audit procedures when processing stored data in an entity’s
information system relevant in the audit and meet audit objectives in an efficient and
productive manner. Audit procedures includes substantive test such as test of details
and substantive analytical procedures, as well as test of controls. In using CAATs,
there are various techniques that the auditor may apply, and these includes test data
method, integrated test facility and test simulation. Each of the technique has its
own cost and benefits, the succeeding sections of this paper will discuss this matter.
Test data method is an approach where auditors process their own test data
or transaction using the client’s computer system and application program. It
consists of correct and incorrect data where expectation is set for each. If incorrect
data is entered into the system, auditor expects the input rejection. Auditors compare
the actual output to the expected output to assess the effectiveness of the
application program’s automated controls.
There are various obvious advantages when using this test data technique. It
may be used to test and validate: input validation routines, error detection
capabilities, processing logic and calculations, accuracy of reports and any manual
processes around the system, however it must be supplied at a point in the process
when manual routines apply. it can be done offline. It merely requires little technical
expertise as it is usually very straightforward to use • As a matter of fact it aids the
auditor in learning how the system works. it can be done offline. Auditors are
concerned about the possibility that the client application throughout the time may
change from the one evaluated. To avoid this problem, an unexpected visit and
copying of the client's programs for eventual examination might be carried out using
the test data approach.
However, there are also disadvantages under this technique. The are cost
involved in creating test data, manually determining outcomes, and determining
which controls to test. Test data method is restricted to control tests only. Also, live
testing is risky because it can disrupt a live database that is being utilized for a
specific run. There is no apparent indication of audit work performed as work must
still be recorded in working papers. And clearly, test data method merely validates
the program's operation at the time of testing.
The technique using integrated test facility is similar to test of data, the
difference is that the testing of the former is live or online. Integrated test facility is an
automated, ongoing approach that allows the auditor to examine an application's
logic and controls while it is running in its normal operation.
Some of the perks of using this technique are the ability to supports
continuous monitoring of controls, testing can be unscheduled and unknown to other
staff. It is economically tested without disrupting the user’s operations and without
the intervention of computer services personnel. Also, it provides prima facie
evidence of correct program functions and only small operational costs are involved
once it is set up.
Parallel Simulation
Some of the edge of using this technique are the fact that the transactions
may be verified by the auditor and the test can be conducted independently by the
auditor. The sample size may be substantially increased at a comparatively low
additional expense. Emphasizing exceptions assists auditors in focusing on items
with discrepancies. And it also allows for the evaluation of the consequences of non-
existent control processes.