Generalized audit-software

Auditing in Information Technology

1. Generalized Audit Software BSA – 5 S.Y. 2016-2017 NDMU

2. Generalized Audit Software the most common computer-assisted audit tool (CAAT) used in recent years It is used to mine and analyse data (often in vast quantities) to identify anomalies, errors and omissions and is used in gathering audit evidence rather than documenting

3. Generalized Audit Software It is an off-the-shelf package that can provide a means to gain access to and interrogate data maintained on computer storage media. It is one of the tools IT Auditors utilize to obtain evidence directly on the quality of the records produced and maintained by application systems.

4. Generalized Audit Software GAS consists of a series of computer program routines that can read computer files, select desired information, perform repetitive calculations, and print reports in an Auditor-specified format. Generalized Audit Software enables Auditors to have direct access to computerized records and to deal effectively with large quantities of data.

5. Example of Generalized Audit Software ACL IDEA

6. ACL (Audit Command Language) a data analysis software program that helps auditors remain current with changing technology. Its primary usefulness lies in its ability to perform analysis and audit tests on 100% of the data available rather than merely sampling the data. The ability to audit 100% of the available data assists auditors with identifying potential fraud patterns and data irregularities.

7. IDEA (Interactive Data Extraction & Analysis) Interactive Data Extraction and Analysis (IDEA) is a leading eAudit data-analytics software package. IDEA provides audit, finance and compliance professionals in industry and practice with an efficient and effective solution for high performance audits. IDEA is also used by tax authorities throughout the world (including the Revenue Commissioners) to interrogate taxpayer transaction and system data.

8. IDEA (Interactive Data Extraction & Analysis) Main functionalities: – Comprehensive analysis of transactional data – Analyse 100% of your data – Identify relationships, patterns and anomalies

9. Functions Explanation File or database access Reads and extracts data from a client’s computer file or databases for further audit testing. 2. Arithmetic functions Perform a variety of arithmetic calculations on transactions, files and databases. 3. Statistical analysis Provide functions supporting various types of audit sampling. 4. Report generation Prepare various types of documents and reports. FUNCTION OF GAS

10. Functions Explanation 5. Examine records For completeness, consistency and correctness by scanning all records using specified criteria and to print out the exceptions. 6. Compare data on separate files Where records on separate files should contain compatible information, a program can be used to determine if the information on various files agrees or to make other comparisons. FUNCTION OF GAS

11. Functions Explanation 7. Select audit samples The computer can be programmed to select samples from any machine-readable data in several different ways, including at random. 8. Print confirmation requests After a sample has been selected, the auditor can have the data printed on confirmation request forms. This is a useful time-saving device for the preparation of confirmations. FUNCTION OF GAS

12. Generalized Audit Software can accomplish the following audit tasks: Footing and balancing entire files or selected data items. Selecting and reporting detailed data contained on files. Selecting stratified statistical samples from data files. Formatting results of tests into reports. Printing confirmations in either standardized or special wording. Screening data and selectively including or excluding items. Comparing two files and identifying any differences. Recalculating data fields.

13. Relatively easy to learn and use Improved efficiencies by automating manual procedures Reduced risk by testing entire populations reducing reliance on sampling GAS can be applied to wide variety of clients with minimal customization . This is a single program that can be applied to a wide range of tasks without having to incur the cost or inconvenience of developing individualized programs . Advantages of GAS

14. Provides documentation of each test performed in the software that can be used as documentation in auditor’s work papers Independent of the system being audited and needs a read-only copy of the file Advantages of GAS

15. The high initial cost of their development It provides a limited ability to verify programming logic because its application is usually directed to testing client files or databases. It involves auditing after the client has processed the data rather than while the data is being processed . Disadvantages of GAS

16. Auditor can use computer audit tools to increase the efficiency of audit procedures • GAS programs - Aid in performing direct tests of account balances maintained on computer files Computer aided audit technique (CAAT) - Perform common audit tasks on a variety of data files USING GENERALIZED AUDIT SOFTWARE TO OBTAIN EVIDENCE

17. AUDITING IN PRACTICE - USING GAS TO TEST FINANCIAL ACCOUNT ASSERTIONS - RECEIVABLES

18. QUIZ!! 1. Generalized audit software packages are used to assist the auditor in performing substantive tests. ( T or F) 2. Generalized audit software packages perform all of the following tasks except: Recalculate data fields Compare files and identify differences Stratify statistical samples Analyze results and form opinions

19. QUIZ!! 3. What does the acronym ACL stand for? 4. What does the acronym IDEA stand for? 5. Give a function of GAS 6-7. Examples of Generalized Audit Software 8. consists of a series of computer program routines that can read computer files, select desired information, perform repetitive calculations, and print reports in an Auditor-specified format. 9. One of the advantages of GAS is that its initial cost of development is high. 10. One of the disadvantages of GAS is that it can be applied to wide variety of clients with minimal customization.

20. References: - http://www.informationactive.com/net/?p=822 -http://www.topcaats.com/types-of-audit-software/ -http://accounting-financial-tax.com/2009/11/techniques-and-technology-used-in-auditing/ -Accounting Information System Ninth Edition by James A. Hall

21. Using GAS to Access Simple File Structure Simple File Structure Production Inventory File GAS Transactions List Auditor determines selection criteria (materiality threshold) and key fields to be retrieved by GAS GAS extracts data selected by auditor and produces a list of inventory items to be counted as part of substantive testing.