CAATs for test of controls and audit procedures

CAATs for test of controls and audit procedures

How can IS Auditor and management take advantage during an evaluation of the business processes and/or audit procedures through the use of Computer Assisted Audit Techniques as part of the financial audit procedures and test of controls place in operations.

Agenda

? Course Objectives ? What is a CAAT? ? Why Use CAAT Tests ? Types of Data Analysis/CAATs ? Basic CAAT Techniques ? Data Analysis Methodology ? Factors Affecting the Reliability ? Test of Controls (SOX, SAS 99, ITGC, Compliance) ? Substantive Testing (Payroll, A/R, A/P and Inventory) ? Examples ? Benefits

Presented by: Juan C. Rego

Course Objectives

At the end of this course you will:

? Understand what is a CAAT. ? Understand types of CAATs and techniques. ? Understand Data Management Methodology. ? Understand CAATs benefits.

What is a CAAT?

A CAAT is the use of a software application or an extract of data to search for and identify trends, exceptions errors, or indications of potential fraud by comparing and analyzing files according to criteria established by the auditor or management. These applications may be purchased packages, such as ACL, Access, Monarch, Excel or embedded report writers that are available with a related business application. This automated testing capability replaces traditional manual searches, tests or samples. From the output generated from the CAAT, an auditor or management can review or test an entire population, at a level of coverage that would not be possible under manual testing methods.

CAATS enable auditors and management to perform many, varied testing routines such as recalculating and verifying balances, identifying control issues, testing for compliance with standards, aging and analyzing accounts receivables/payables or any other time sensitive transactions, testing for duplicate payments, and gaps in invoice numbers, etc. CAATs can increase the effectiveness of an auditor's or management's work by impacting the depth of the auditor's or management's analysis and understanding because data tells the story!

Why Use CAAT Tests

9 Validate financial reports and information 9 Increased report flexibility and choices 9 Merge files (e.g. inventory and sales, across business units) 9 Independent of financial system prepared reports 9 Increase efficiency and effectiveness of audit testing

- focus ? transaction types, trends etc - scope ? all data, all systems, all locations - risk management ? better transaction information

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