Advantages of Computer Aided Audit Techniques (CAATs)

Procurement and Audit notes revision

CAATs allow the auditor to:
a) Test programmed controls: in a computer based procurement system, there are large volume of transactions which the auditor will have to audit. The auditor will have to check if the programmed controls are functioning correctly. The only effective way of testing programmed controls is through CAAT.
b) Test on large volume of data: CAAT enable auditors to test large amount of data quickly and accurately and therefore increase the confidence they have in their opinion.
c) Test on source location of data: CAAT enables auditors to test the procurement systems and its records (e.g. disk files) at its source location rather than testing the printouts of what they believe to be a copy of those records.
d) Cost effective: once set up CAAT are likely to be cost effective way of obtaining audit evidence year after year provided that the client does not change the procurement system regularly.
e) Comparison: allows results from using CAAT to be compared to traditional testing. Where the two results agree this increase the overall audit confidence.
f) Independently access the data stored on a computer system without dependence on the client;
g) Test the reliability of client software, i.e. the IT application controls (the results of which can then be used to assess control risk and design further audit procedures);
h) Increase the accuracy of audit tests; and
i) Perform audit tests more efficiently, which in the long-term will result in a more cost effective audit.

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