Computer Assisted Audit Techniques (CAATs)

CAATs stand for Computer Assisted Audit Techniques. It is the tool which
is used by the auditors. This tool facilitates them to make search from the
irregularities from the given data. With the help of this tool, the internal
accounting department of any firm will be able to provide more analytical
results. These tools are used throughout every business environment and
also in the industry sectors too. With the help of Computer Assisted Audit
Techniques, more forensic accounting with more analysis can be done. It
is a really helpful tool that helps the firm auditor to work in an efficient
and productive manner.
The CAAT tool supports the forensic accounting in which larger amount
can be diverted to analytical form and it also prompts where the tool
detects the fraud. This tool simplifies the data and in the automated
form. The name of CAATS tool in placed in almost every firm where the
auditing or advance level accounting takes place. The firm is well aware
of the benefits of these tools and also making some advancement in this
tool in accordance with their need, in return all the large raw data
becomes in statistical and analytical form. It is a time saving tool.
With the advancement in the field of technology, many easy to use and
more efficient CAATs tools are available. Accountants of the present
business world found this tool very much easier to use as the new
upcoming tools come with the guide book and even are users friendly.
For working with the CAAT tool, it is essential for the accountant or the
auditors to select the right data, the selection process is very much tricky
and you need to be professional for it. After selecting the right data,
import that to the CAAT tool, now the tool will automatically generate the
analytical data. This tool really contributes to the efficiency of the
auditors.
Creation of electronic work papers
Keeping electronic work papers on a centralized audit file or database will
allow the auditor to negative through current and archived working
papers with ease. The database will make it easier for auditors to
coordinates current audits and ensure they consider finding from prior or
related projects. Additionally, the auditors will be able to electronically
standardize audit forms and formats, which can improve both the quality
and consistency of the audit working papers.
Fraud detection
CAATs provides auditors with tools that cam identify unexpected or
unexplained patterns in data that may indicate fraud. Whether the CAATs
is simple or complex, data analysis provides many benefits in the
prevention and detection of fraud.
CAATs can assist the auditor in detecting fraud by performing and
creating the following,
Analytical tests
Evaluations of financial information made by study plausible relationships
among both financial and non-financial data to access whether amount

balances appear reasonable (AU 329). Examples include ratio, trend, and
Benfords Law tests.

Data Analysis reports

Reports produced using specific audit commands such as filtering records
and joining data files.
Curb stoning in surveys
Curb stoning is the term for instances where a surveyor completes a
survey from by making up data. Because some of the data should
conform with Benfords law, this practice can be detected using CAATS
which provide the capability of performing such tests.

Advantages of CAATs
Independently access the data stored on a computer system without
dependence on the client.
Test the reliability of client software, i.e. the IT application controls
(the results of which can then be used to access control risk and
design further audit procedures).
Increase the accuracy of audit tests.
Perform audit tests more efficiently, which in the long-term will
result in a more cost effective audit.

Prepared By:
Muhammad Jawad(12324)
Talha Tariq

(12398)

Sadia Shoukat

(12392)

Ahmed Shoaib

(12306)

Submitted to:
Maam Ayesha Sehrif

Semester:
5th (Evening)

Department:
Information Technology

Session:
2014-2018

Government College University Faisalabad