A computer-assisted audit is a broad term; it basically encompasses any audit conducted with the aid of computers. Two levels exist for these types of audits: basic and advanced. A basic computer-assisted audit involves the use of spreadsheets and word processors to prepare and review information. An advanced audit uses specific auditing software that allows for statistical analysis through an input-output process. Auditors can use the software by entering client information into the software and creating reports that present analytical information regarding the data.
Public accounting firms — the common source for audits conducted by licensed accountants — typically requires access to the client’s accounting software system. This requires the use of computers, leading to a computer-assisted audit. Auditors have the ability to access financial information and use spreadsheets or other software programs to prepare and analyze client data. While hard copies of the information may also be necessary, auditors often use the computer to recreate and test the information on these reports. In some cases, auditing a remote client location may require the use of computers to log in through an Internet connection into the client’s system.
Typically, the computer-assisted audit speeds up some of the standard audit processes an auditor must complete. Rather than spending copious time on preparing information, the computer prepares and reports data. The auditor can then spend more time reviewing and critiquing the data, which is the crux of the audit. Multiple auditors can each use a computer to work through more information in less time. This allows the audit to go smoothly and helps auditors to select sample groups of information quicker than not using a computer.
A significant benefit of the computer-assisted audit is the ability to securely work on client information at multiple locations. For example, auditors can download multiple bits of information from client accounting software. The auditors can then protect these documents using password protection and other restrictive computer tools. Auditors can also work on the client’s information at the client’s location or at the auditor’s location. The computer-assisted audit also prevents auditors from lugging around paperwork that can be lost or damaged during transport.
Although adding efficiencies, the computer-assisted audit is not without its problems. For example, an auditor must have a location where he or she can access power outlets and log into the client’s accounting software. The inability to access certain information due to software incompatibility is another potential issue. Auditors may also have difficulty sending large documents through e-mail or other Internet methods to the client or other auditors.
