M5 CAATS (auditing in a CIS environment)

Question 1

What is CAATs and GAS?

Answer 1

• CAATs is the computer assisted auditing techniques
• GAS is the generalized Audit software
• both are used in order to audit the data of clients

Question 2

What types of CAATs are there?

Answer 2

system orientated CAATs
* these audit the system that processes the clients information, like test of controls
data orientated CAATs
* these audit the data that is passed through that system

Question 3

what sections are relevant to us using CAATs and GAS as auditors?

Answer 3

ISA 402 - Audit considerations relating to an entity using a service organization

Question 4

What are a couple CAATS to memorise?

Answer 4

Selecting a sample of accounts payable according to set criteria:
 all items above a certain rand value,
 a certain number of nil balances,
 duplicate account numbers and a
 random sample of the rest) and
 printing out the supplier’s details such as supplier’s name, address
and balance owing

Casting individual accounts payable accounts.

Casting the accounts payable year end master file and printing out the total

Test cut-off of purchases at year end by:
 identifying from the inventory master file goods received for say 3
days before the year end and 3 days after the year end and
 comparing supplier details and amounts to the purchase
transaction logs recorded before and after the year end respectively.

Calculating prescribed ratios:
 Gross profit %
 Accounts payable/purchases per day/average number of purchases per
day which should be compared to the standard credit terms.
 Sales to Accounts payable. This ratio is an indication of the company’s
ability to raise interest free funds.