CAATs John Tyrpak Steve Sheller Philip Andrews Ginger

CAATs John Tyrpak Steve Sheller Philip Andrews Ginger Bean

The Difference Between CAATS and CAATTS – CAATs are Computer Assisted Audit Techniques – CAATTs are Computer Assisted Audit Tools and Techniques – Benefit: Now able to test 100% of data and it’s efficient

CAATs • Software used to increase an auditor’s personal productivity and software used to perform data extraction and analysis • Techniques to increase the efficiency and effectiveness of audit function

Types of CAATs • Any software that assists the auditor in performing administrative tasks more efficiently. (Word, Excel) • Software used to manage the engagement • ACL – Audit Command Language (bestknown software)

Audit Tools with CAATs – Productivity Tools • • • E Work papers Groupware Time and Billing Software Reference Libraries Document Management – Generalized Audit Software (GAS) Tools • • ACL (most common) Audit. Expert Systems Utility Software Statistical Software

Computer Assisted Audit Tools Productivity Tools • E-workpapers – Creating a “paperless” workplace • Groupware – Allows multi-user scheduling, planning, file sharing • Time and Billing Software – Easily account for chargeable hours and prepare bills • Reference Libraries – Efficiency in finding and reporting information • Document Management – Online storage of documents made readily available

Computer Assisted Audit Tools Generalized Audit Software Tools • ACL – Performs the routine tasks • Audit Expert Systems – Based on a series of “if-then” production rules • Statistical Analysis – Performs statistical analysis on a client’s data file

Audit Techniques with CAATs – Validate Application Integrity • Test Data • Integrated Test Facility (ITF) • Parallel Simulation – Verify Data Integrity • Data Extraction and Analysis • Detect Fraud • Continuous Auditing Techniques

Ten Steps to using CAATs – Steps 1 – 4 involve Planning – Steps 5 – 6 involve requesting and importing data – Step 7 – 9 Testing data – Step 10 – Documenting results

Planning • Set Key Objectives • Identify CAATs • Data Needed from the Client

Data Processing • ACL • CAATs Processes

Final Processes • Exceptions • Document Results

Benford’s Law • The leading digit of a series of naturally occurring numbers does not follow a uniform distribution. It will follow an exponential distribution. • http: //en. wikipedia. org/wiki/Benford%27 s_law • http: //www. kirix. com/blog/2008/07/22/funand-fraud-detection-with-benfords-law/

Payroll Fraud • Controls in Place • Getting CAATs Involved • A Fraud Discovered

Sources • Core Concepts of Information Technology Auditing; Hunton, Bryant, Bagranoff • http: //en. wikipedia. org/wiki/Benford%27 s_law • http: //www. kirix. com/blog/2008/07/22/funand-fraud-detection-with-benfords-law/ • Bnet Business Network online http: //findarticles. com/p/articles/mi_m 4153/i s_3_58/ai_77151373/pg_1? tag=art. Body; col 1