Substantive testing of computer records is possible and necessary.
The extent depends on the degree of reliance the auditor has placed on the internal controls. Substantive testing includes two basic approaches both of which would be used. Manual testing techniques.
• Review of exception reports. The auditor attempts to confirm these with other data. e.g. comparison of an outstanding dispatch note listing with the actual dispatch notes.
• Totalling. Relevant totals for example for debtors and creditors can be manually verified.
• Re-performance. The auditor may re-perform a sample of computer generated calculations. E.g. for depreciation and interest expense.
• Reconciliations. These will include reconciliations for computer listings with creditor’s statements, bank statements, actual stock and personnel records.
• Comparison with other evidence such as results of debtor’s circularization, attendance at stock take and physical inspection of fixed asset. Computer audit programs sometimes generalized audit software. These programs are also called inquiry or interrogation programs. Computer audit programs are computer programs used by the auditor to;
• Read magnetic files and to extract specified information from the files.
• To carry out audit work on the contents of the files.