Computer Assisted Audit

Tools and Techniques

Chapter 7
Computer Assisted Audit Tools and
Techniques
• Classes of transaction input controls
• Objectives and Techniques used to implement processing controls
(Run-to-run Control, Operator Intervention Control and Audit Trail
Control)
• Methods used to establish effective output controls for both batch
and real-time systems
• Differences between black box and white box auditing
• Key features of the five CAATTs (Test data method, Base case
system evaluation, Tracing, Integrated test facility and Parallel
Simulation)
Application Control – are programmed procedures
designed to deal with potential exposures that
threaten specific applications, such as payroll,
purchases and cash disbursement systems.

• Input Controls
• Processing Controls
• Output Controls
Input Controls – are designed to ensure that these
transactions are valid, accurate and complete

Data input procedures:

• Source document-triggered (Batch) – requires
human involvement and is prone to clerical errors
• Direct Input (Real time) – employs real-time
editing techniques to identify and correct errors
immediately
Classes of Input Controls
• Source document controls
• Data coding controls
• Batch controls
• Validation controls
• Input error correction
• Generalized data input systems
Source Document Controls – control in systems using
physical source documents
Source document fraud
Control Procedures:
• Use Pre-numbered Source Document
• Use Source Documents in Sequence
• Periodically Audit Source Document
Data Coding Controls - coding controls are checks on the integrity
of data codes used in processing
Types of errors:
• Transcription errors
• Addition errors
• Truncation errors
• Substitution errors
• Single transposition errors – occurs when two adjacent digits
are reversed
• Multiple transposition errors – occur when nonadjacent digits
are transposed
• Check Digit – is a control digit (or digits) added to the
code when it is originally assigned that allows the
integrity of the code to be established during
subsequent processing
• Modulus 11
Batch Controls – are an effective method of managing high volumes
of transaction data through a system.
This provide assurance that:
• All records in the batch are processed
• No records are processed more than once
• An audit trail of transactions is created from input through
processing to the output stage of the system
Batch transmittal sheet
Batch control log
Hash totals – refers to a simple control technique that uses
nonfinancial data to keep track of the records in a batch.