Computer Assisted Audit Techniques (CAAT)

Audits are performed to ascertain the validity and reliability of information, and also provide an assessment of a system's internal control.

In financial accounting, an audit is an independent assessment of the fairness by which a company's financial statements are presented by its management. Auditing in the computer based information system involves complex data extraction, error detection, log checks etc.

The audit procedures can be grouped into five categories:
1. Audit tests include basic population statistics, data stratification, checks for gaps in numeric sequences, testing for holidays, classifying transaction dates by day of week and tests using Benford's Law.

2. Cost recovery procedures include identification of potential duplicate invoice payments.

3. Data extraction includes a comprehensive suite of functions to enable the auditor to focus on the specific data relevant for the procedure.

4. Fraud and error detection includes a variety of tests designed to hi light "outliers" as well as detect potential duplicates using either the "same, same, same" test or "same, same, different".

5. Analytic review procedures include various linear regression tests, "napkin" tests and "mini-max.

The audit test includes:
1. Basic population statistics
2. Tests for round numbers
3. Gaps in numeric sequences
4. Check for dates falling on holidays
5. Transaction count by day of week
6. Tests with Benford's Law
7. Data stratification

Some of the popular softwares are ACL, SAS, JMP, EZ-R Stats.

Overview of ACL:
ACL is platform independent software, and can communicate with multiple data platform like (Oracle, SAP ERP etc). The software works on image format, and is not pre programmed. The image file format is proprietary of ACL. The software occupies not more than 30 MB of the disk space and the reports cannot be tampered or ported to another system. The interface is simple and can extract data from all the commercial databases. The latest version on offer by ACL is ACL Xchange 2009