“ Not everything that can be counted counts, and non everything that counts can be counted ” – Albert Einstein
1.1 Background Information
In recent old ages, particularly due to the impact the fiscal crisis had on concern assurance, important attempt has been made to better the effectivity of the audit profession in visible radiation of its increasing importance to the stableness of markets. Furthermore, the quality of the audits of Public Interest Entities ( PIEs ) is critical to the general populace, who have a direct or indirect interest in the public presentation of such entities. Since users of fiscal statements rely on the hearer ‘s sentiment on the fiscal statements to back up their investing determinations, the audit profession is continuously happening ways to better the quality of the audit.
In add-on, the dominant progresss in Information Technology ( IT ) of the 20th century have changed the manner many organisations conduct their concern. Nowadays, Information Systems ( IS ) are at the bosom of the concern procedure of many administrations. As an increased figure of concern administrations engage in electronic commercialism and every bit much of the traditional audit trail disappears, it becomes critical for hearers to understand the basicss of making concern electronically and develop new audit techniques for such environment. Undoubtedly, the application of Information Technology in carrying-out audit procedures will be indispensable, now and in the foreseeable hereafter.
As many foreign writers have identified in recent old ages, the manner the audit is conducted is germinating due to the go uping relationship between accounting and information systems. The coming of computing machines has non merely brought with it threats to the audit profession, but it has besides brought the chance of bettering the audit procedure itself, therefore forcing audit houses in the hunt for higher efficiency and effectivity ( Zammit, 1999 ) .
Given the of all time increasing potency of Information Technology and public outlook for increasing efficiency and effectivity of the audit procedure, the scrutinizing profession has been, and still is, faced with the demand to supply increased counsel and efficiency of audits conducted in an IT environment. The overall aims and range of an audit remain the same whether an audit is carried out in a Computer Information System ( CIS ) environment or non. On the other manus, the application of scrutinizing processs may necessitate the hearer to see the usage of Computer Assisted Audit Tools and Techniques ( CAATTs ) . Such techniques use the computing machine to heighten the effectivity and efficiency of audit processs. In a ‘Guidance note on Computer Assisted Audit Techniques ‘ issues by the Chartered Accountant on January 2004, CAATTs are defined as computing machine tools and techniques that hearers ( external or internal ) usage as portion of their audit processs to treat audit informations that is held within in an entity ‘s information system.
1.2 Need for such a survey
This survey analyses the pertinence and usage of Computer-Assisted Audit Techniques ( CAATs ) from the position of the Big Audited account houses.
Computer Assisted Audit Tools & A ; Techniques, as their name suggests, include both ‘Tools ‘ and ‘Techniques ‘ . Although they are much related, the acronyms CAATTs and CAATs are used interchangeably by assorted writers. An of import differentiation demands to be made between the two as the former refers to both the tools and techniques, while the latter refers to either tools or techniques. For the intent of this survey the acronym CAATs will mention to Computer-Assisted Audit Techniques.
Earlier foreign CAATs research has been by and large descriptive in nature. In add-on, recent Maltese surveies were carried-out with the aim to place which audit package is normally used by the audit houses, and the cost & A ; benefits attached to the usage of such audit package ( Audit Software is an illustration of a Computer-Assisted Audit Tools ) . These surveies were chiefly focused on the Computer-Assisted Audit Tools side, but no extended research was made on the Computer-Assisted Audit Techniques used in the audit procedure such as Test Data, Integrated Test Facility ( ITF ) , and Parallel Simulation ; which may be used in executing assorted scrutinizing processs such as trials of inside informations, analytical processs, and trials of controls.
1.3 Research Aims
Since no old surveies were carried out on this country, this survey ‘s overall aim is to give a practical illustration of how CAATs are used by the Big Four houses and to measure the benefits derived from the usage of such techniques. The survey, amongst other findings, will concentrate on:
Measuring the deciding factors for effectual application of CAATs in the audit procedure
Analyzing which CAATs are normally used by the Big Four Audited account houses and the pertinence of such techniques
Analyzing the benefits reaped by the Big Four Audited account Firms when utilizing CAATs as portion of the audit procedure
Measuring whether the usage of CAATs is expected to increase in the foreseeable hereafter as a manner of continuously increasing effectivity and efficiency of Maltese audits
Scope and Restrictions
Bridges between techniques
Research Methodology
The research for this survey will be qualitative in nature as the purpose of this survey is to give an penetration of the pertinence of CAATs and how these techniques can assist the Big Audited account Firms increase the efficiency and effectivity of the audit and therefore meeting with the populace ‘s outlooks.
In the procedure of garnering the empirical information, elaborate interviews will be carried out with representatives from the Big Audited account Firms. The interviewees would hold IT knowledge and sufficient experience in the usage of CAATs so as to acquire a position of how CAATs can help the hearers at the different degrees and phases of the audit procedure.
