CAATsJohn Tyrpak

Steve ShellerPhilip AndrewsGinger 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 (best-

known 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)• AuditExpert Systems• Utility Software• Statistical Software

Computer Assisted Audit ToolsProductivity 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%27s_law• http://www.kirix.com/blog/2008/07/22/fun-a

nd-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%27s_law• http://www.kirix.com/blog/2008/07/22/fun-a

nd-fraud-detection-with-benfords-law/• Bnet Business Network online

http://findarticles.com/p/articles/mi_m4153/is_3_58/ai_77151373/pg_1?tag=artBody;col1