15.5 Auditors use of computers in the course of audit

Auditors extensively use computers in the course of conducting audits. Computer-assisted audit techniques (CAATs) and various audit software applications are utilized to enhance audit effectiveness and efficiency. Here are some ways auditors use computers in the audit process:

1. Data Analysis: Auditors use specialized audit software to analyze large volumes of data quickly and accurately. They can perform tests, such as trend analysis, ratio analysis, and anomaly detection, to identify unusual transactions or patterns that may indicate potential risks or irregularities.
2. Audit Trail Analysis: Computers enable auditors to trace and analyze audit trails, which document the sequence of events or activities within a computerized system. This helps auditors gain a better understanding of how data is processed and identify any gaps or control weaknesses in the system.
3. Test of Controls: Auditors use computerized tools to perform test of controls, such as sampling transactions, evaluating system-generated controls, and assessing compliance with established policies and procedures. This allows for a more efficient and effective evaluation of internal controls.
4. Substantive Testing: Computers aid auditors in performing substantive testing procedures. They can extract relevant data from financial systems, perform calculations, verify accuracy, and conduct other substantive procedures to gather sufficient and appropriate audit evidence.
5. Data Extraction and Import: Auditors can extract data from various sources, such as client databases or third-party systems, and import it into audit software for analysis. This reduces manual effort and improves data accuracy and consistency.
6. Documentation and Working Papers: Computers enable auditors to create, organize, and store electronic working papers and documentation. This facilitates collaboration among audit team members, improves document management, and enhances the overall audit trail.
7. Audit Reporting: Auditors use computers to generate audit reports and financial statements. They can prepare customized reports, including graphs and visuals, to present audit findings and recommendations effectively.