CAAT - or - jNIK

Electronic papers for audits(authors: Paweł Banaś, Piotr Madziar, Wiesław Sawicki)

Tradition

• Supreme Chamber of Control – 1919• roots in early XIX century • indispensable element of modern democratic

Poland

Complex Audit Procedure

• most audits are multi-location type• documents:

– Audit Plan

– Protocol (per location)

– Management letter (per location)

– Report

• quality requirements sometimes resulted in massive documents

Figure 1 General Scheme of the NIK Audit Procedure – documents produced and archived in MSWord format

Planningrisk assessment

analysis of external information and documents of NIK

Decisionof the

NIK Board

Audit Plandraft

Audit Procedures

Appeal Phase

Protocol

Appeal Phase

ManagementLetter

NIK Report

Audit Procedures

Appeal Phase

Protocol

Appeal Phase

ManagementLetter

MS Word

yes

yes yes

yes

no

no

no

no

no

Computerisation & Financial CAAT

• mid-90’s NIK underwent rapid computerisation • late 90’s NIK has been using CAATs• Auditor Assistant• other basic computing tools

More needed

• IT tool most extensively used – MSWord – not calibrated for the auditor needs – auditor has to play the role of a professional brochure-

maker

• problem with internal or bilateral documents• focus the attention on the content• simplest solution – calibration of the MSWord

– standardize the documents’ layouts,– easy retrieve analytical data with ‘styles’ and pre-made

macros

Is Word Processor a CAAT?

• can ‘hardly be a CAAT’ in financial audit • can be ‘much more a CAAT’ in the performance

or VFM audit

Desired Functions and Features

• replace an ‘empty page’ with a flexible electronic form

• free the auditor from the duty of text formatting • treat audit documents as data collections • free our data repositories from formatting code of

word processor

Flexible and Open Source

• no solution available on the market • something much more flexible then the product

prêt-a-porter • many difficulties in construction

– the risk that the new tool will deform our way of work

– the long and expensive process of outsourcing our individual project

• XML and Java

CAAT or jNIK: technology

• first version of CAAT‑or‑ jNIK – Summer 2003• technology of jNIK

– user interface is written in Java Swing – internal XML processing is based on DOM standard

being part of JAXP– tree with each branch connected to e-form (part of the

XML file)

• XML file can be: – full Audit Plan, next used as the Protocol– visualised in HTML, PDF format

Figure 2 Technology of jNIK.

SWING DOM XML HTMLXSLT

JAVA

CAAT or jNIK: key features

• e-form, not text editor • disciplines the audit teams to relate to all points in

the Audit Plan • means much more easier screening of the teams’

work • organizes and stores the data as XML documents

Figure 3 The Audit Plan view

Figure 4 The Protocol view

Figure 5 Printout of Protocol

Hierarchy of Document

• dictionary of XML elements and limit the number of levels

• 3-level hierarchy of the Audit Plan:– auditee(s)– areas – subjects

• next levels of the ‘problem’ branches:– groups of findings – findings

Results

• user obtains a set of XML data: – Audit Plan – Protocol – elements to construct the Management Letter and the

Report

• much less disc space that MSWord files • light software• applied to the SCC audit procedure• ... but very flexible

Figure 6. General Scheme of the NIK Audit Procedure – use of jNIK and MSWord

Planningrisk assessment

analysis of external information and documents of NIK

Decisionof the

NIK Board

Audit Plandraft

Audit Procedures

Appeal Phase

Protocol

Appeal Phase

ManagementLetter

NIK Report

Audit Procedures

Appeal Phase

Protocol

Appeal Phase

ManagementLetter

Analytical DataMS Word

final version:xhtml / pdf

final version:xhtml / pdf

XML to Word

no

yes

no no

yes

yes

yes

no no

data reports

Word to XML

jNIK

findings

Conclusions

• fits into real needs of the organisation • cost-free • home-grown support team to fill gaps • supports open source environment • more money on IT training

Future plans

• gain fully stable version• internationalization of the Java code• make jNIK publicly available by GPL licence