Activity 3 - CAATs

Republic Central Colleges
Angeles City
College of Business and Accountancy
Activity 3- CAATTs
Name Paula Gozun
Score
I- True or False. Write the word “True” if the statement is correct and the word “False” if the
statement is incorrect.
Answer sheet. Write you answer below.
1 True 5 False 9 True 13 True 17 False
2 False 6 False 10 False 14 False 18 False
3 True 7 True 11 False 15 True 19 True
4 True 8 False 12 True 16 True 20 True
1. CAATs allow the auditor to give access to data without dependence on the client and
perform audit tests more efficiently
2. CAATs consist of program that used by an entity to perform common data processing
functions called “utility programs”
3. When the auditor intends to perform audit procedures concurrently with online
processing, the auditor reviews those procedures with appropriate client personnel and
obtains approval before conducting the tests to help avoid the inadvertent corruption of
client records
4. The presence of the auditor is not necessarily required at the computer facility during the
running of CAAT to ensure appropriate control procedures
5. One of the factors to consider in the use of CAATs is audit procedure for application
control
6. Auditape, an early audit program does not require users to learn specialized programming
languages such as COBOL
7. GAS may be used on any type of computer because it is hardware independent
8. One of the first microcomputer based audit programs is IDEA. It stands for interactive
Data Expansion and Analysis.
9. Among the audit tasks that can be performed using Generalized Audit Software (GAS) is
comparing two files and identifying any differences
10. GAS languages required expertise IT background on the part of the external auditor
11. GAS can provide the auditor selected sample records and prepare reports without
further testing the result
12. Audit Command language (ACL) does not necessarily require knowledge of
programming language.
13. ACL enables accessibility of data in diverse formats and on various types of storage
devices
14. ACL can read only certain types of tapes and cartridges
15. ACL allows defining new fields that do not exist in the file
16. A very useful ACL command for determining if the completeness assertion has been
met and great for testing for missing policies for insurance company data files. This
command is called “Duplicates”.
17. Command language used in ACL like “Classify” able to compute and display the value of
an expression
18. This audit module for continuous auditing, examines all transactions that update the
DBMS and any discrepancies exist, the details of these discrepancies are written onto
an audit log for subsequent investigation. This module is called an embedded audit
module.
19. Command log is the most complete documentation tool in ACL for it includes print
option with this window
20. This ACL command counts the number of records falling into each unique class and
accumulates totals that can be used to sort and summarize transaction called “Count”
4 II- 5 points (Research ) Identify the general advantages of using computer audit
software to assist with audits without regard to any specific computer audit software.
The computer-assisted audit tools and techniques (CAATs) are those technology
enabled tools and techniques that increase the efficiency of the conduct of audits.
(Braun and Davis). define CAATs as the use of any technology that enables an auditor
to conduct auditing tasks. The computer-assisted audit tools and techniques
The following are the advantages of using CAATs
Speed and Accuracy
The primary advantage to assisted audits is the increased speed and accuracy. Also,
auditing programs tend to come with useful checks and balances that spot not only
calculation errors in business books but also mismatched item entries and potential
regulatory issues.
Models
The more complex auditing tools can provide another level of aid by generating
computer models and simulations for the auditor.
Standardize The Auditing Process
Auditing software is created in compliance with international auditing standards and

helps the organizations in conductance of standardized audits.
Obtain Visual Statistics
These visual statistics surpass any manual representation of auditing data and helps
organizations in better understanding the results.
Improve Productivity
As the audit software eliminates the need for data duplication and conformation,
organizations can invest more time in performing tasks which are more important to
them.
The following are the disadvantage of using CAATs
Adaptability and Training Issues
On the downside, If the software is out of date or is not designed to be used for a
particular auditing purpose, Also, any time a new program is used auditors must be
trained on how to use it correctly, which can lead to high costs in time and money for
auditing firms.
Auditor Experience and Judgment
For many audits, auditors must make a judgment call on whether or not the business
should change its accounting practices, especially related to the risk of fraud or the
need to comply with federal regulations. It is very difficult for a computer system to
make such a judgment call, taking into account all potential factors, and lessens the
usefulness of assisting programs in the final results of the audit.
Reference:
Quinn, M. (2020). The Advantages of using Software for your Internal Audits
https://www.apomatix.com/blog/the-advantages-of-using-software-for-your-internal-
audits/
Ahmed, A. (2018). Benefits Of Using Audit Software https://tgdaily.com/technology/

software/benefits-of-using-audit-software/
Mwansa, F. (2016). advantages of using computer assisted audit techniques https:/

/specialties.bayt.com/en/specialties/q/268822/can-you-explain-the-potential-
advantages-of-using-computer-assited-audt-techniques/

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Republic Central Colleges

Answer sheet. Write you answer below.

1 True 5 False 9 True 13 True 17 False

2 False 6 False 10 False 14 False 18 False

3 True 7 True 11 False 15 True 19 True

4 True 8 False 12 True 16 True 20 True

7. GAS may be used on any type of computer because it is hardware independent

The following are the advantages of using CAATs

Speed and Accuracy

Standardize The Auditing Process

Auditing software is created in compliance with international auditing standards and

Obtain Visual Statistics

The following are the disadvantage of using CAATs

Adaptability and Training Issues

Ahmed, A. (2018). Benefits Of Using Audit Software https://tgdaily.com/technology/

Mwansa, F. (2016). advantages of using computer assisted audit techniques https:/

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