Effectiveness Of Computer Assisted Audit Techniques Accounting Essay Example For Students

Effectiveness Of Computer Assisted Audit Techniques Accounting Essay Research Problem: Many surveies have been conducted to analyse the determiners for effectual application of IT, and analyze the tools used by information system hearers in many foreign states. The usage of engineering has been adopted in about all plants today, particularly with the spread outing function of e-commerce in the economic system, most hearers are following audit package in the audit procedure. But ( I ) to what widen have computing machine assisted audit techniques ( CAATs ) been adopted by hearers in Mauritius? ( two ) given the effectual result produced by information engineering s and public outlook for quality of audit procedure, why are there still some hearers trusting on traditional audit trail in Mauritius? Purpose of the survey: The demand for this research crops up due to extremely competitory and continuously altering concern environment in which the accounting and auditing houses operate, and as such hearers are following computing machine assisted audit techniques ( CAATs ) . The intents of this survey are to acquire an overall image of the consciousness, attitudes and degree of engagement of Mauritanian hearers for the acceptance of CAATs in the audit procedure, which package and techniques they use, such that the effectivity of CAATs in helping the hearers in the audit procedure is investigated. Methods to be used: A sum of 200 hearers shall be chosen indiscriminately and the study shall be carried out by face-to-face interview utilizing a questionnaire. The questionnaire shall be used to measure the factors impacting audit houses to follow CAATs in their work, what are the benefits as compared to their manual manner of working, and to what widen to they believe that CAATs help them in their day-to-day work so as to look into hearers behavior and attitude in a computerized environment. In add-on directors shall be interviewed every bit good so as to cognize what their positions are on and future program refering CAATs. Data would be analyzed by utilizing tools like SPSS. Undertaking results ( outlook ) : The expected result shall bespeak that both direction and employees believe that effectual applications of CAATs in the audit procedure have high potency for heightening work efficiency and effectivity, and that in the hereafter old ages, most hearers will travel towards the version of CAATs, switching from a paper-based audit environment altering the nature of audit procedure and obtaining grounds electronically in Mauritius. Benefits of the research: This research will reply the undermentioned inquiries ; make hearers truly find the benefits in the usage of engineerings? Does IT lend in retaining the public assurance in hearers work? Or does the usage of CAATs enhance the credibleness of users of fiscal statements? Technology enhances work expeditiously, and likewise, hearers can do good, efficient usage of it to acquire the most effectual end product in footings of their audit judgement. Therefore, the benefits of this research will be to increase the consciousness of hearers about the assorted advantages CAATs offer them such that they remain in line with altering environment. Hence the populace, particularly investors, will hold faith in hearers work, since the usage of engineering surely discourages audit failures. Furthermore being cognizant of the benefits of CAATs greatly influences the point of position of other hearers who want to better their working methods, every bit good as this research could supply thoughts to package developers on how audit package could be improved to better suit for scrutinizing procedure. Research proposal Definition of the research job Brief reappraisal of the literature relevant to the research job The research aims and their intended benefits Description of the intended research methodological analysis to be used, including informations aggregation methods. Probationary Gantt chart on how I would finish the different undertakings for my research List of bing mentions ( articles, books, other publications ) that I intend to utilize or entree for my undertaking or thesis. Outline1 List of Abbreviations2 1 Research Proposal3 1.1 Executive Summary4 1.2 Research Problem5 1.3 Literature Review6 Prior CAAT Research7 1.3.1 Hearer8 1.3.1.1 Importance of hearer giving an appropriate audit sentiment after the audit procedure9 1.3.2 Computer Assisted Audit Techniques ( CAATs )10 1.3.2.2 Benefits of CAATs11 1.3.2.4 Generalized Audit Software12 1.3.3 Hearers in a computerized audit procedure13 1.3.3.1 Uses of CAATs14 1.3.3.2 Hearers utilizing CAATs worldwide15 Rank16 201217 201118 201019 120 221 322 423 524 1.3.3.3 Auditing Software Used25 States26 Name of package27 Main map28 Table 3: Audited account Software Percentage of Use29 Type of CAATs usage by hearers30 Percentage of use ( % )31 1.3.3.4 Hearers following CAATs in Mauritius32 1.4 Research Objective ( s )33 1.4.1 Aims of the research34 This assignment has two overall aims:35 Specific aims:36 1.4.2 Intended benefits of the survey37 1.4.3 Research Hypotheses38 1.5 Research Methodology39 1.5.1 Type of methodo logical analysis to be used and informations aggregation methods40 1.5.2 Population or Sampling choice41 1.5.3 Sampling program42 1.5.4 Sampling method43 1.6 Gantt chart44 1.7 Budgeting45 Outgos46 Equivalent cost List of Abbreviations ACL Audit Control Language AICPA American Institute of Certified Public Accountants CAE Chief Audit Executive IFAC International Federation of Accountants IDEA Interactive Data Extraction and Analysis ISA International Standards on Auditing ISACA Information Systems Audit and Control Association IT Information Technology 1 Research Proposal Area: Auditing Field: Information Technology Audit Aspect: Hearers work and Information Technology techniques Subject: Effectiveness of Computer Assisted Audit Techniques on hearers work in heightening the audit procedure ; as a beginning of bring forthing a good and efficient audit sentiment in Mauritius 1.1 Executive Summary Nowadays the capablenesss and chances provided by IT have transformed many legitimate concern activities, augmenting the velocity, easiness, and scope with which concern minutess can be conducted electronically, while besides take downing costs. Rapid alterations in engineering indicate that traditional auditing techniques are disused and inefficient in vouching the unity of an entity s minutess. Hearers work contributes significantly to the stableness of fiscal markets. Furthermore with engineering important alterations have been made to get by with the developments in IT and run into the increasing demands of hearers in scrutinizing professions. In this respect, CAATs have been introduced to assistance hearers. CAATs audit package allows hearers to finish most processs on-line ; ACL and IDEA package. Because many concerns at present usage computing machines to treat their minutess, the scrutinizing profession has been faced with a demand to supply increased counsel for audits cond ucted in an IT environment. Assorted important organic structures, such as the AICPA, the IFAC and the ISACA have issued criterions in this country such as ISA 401 Auditing in a Computer Information Systems Environment ; ISA 1008 Risk Assessments and Internal Control Electronic Environment . To the predating point, this paper seeks to research hearers purposes and behavior towards the use and acceptance of CAATs within their audit battles. The survey investigates the usage and acceptance of CAATs by hearers in Mauritius, which acts as the key in making an environment where the populace, particularly investors, will hold faith in hearers work, since the usage of engineering surely discourages audit failures and enhances audit work. 1.2 Research Problem With the fiscal crisis stakeholders and regulators, due to their concerns for the audit quality, have criticized the scrutinizing profession. The job is that there are audit failures such as Enron and WorldCom arising, which make people lose assurance in hearers work. At the same clip, the concern universe is altering, traveling to a computerized dimension. Along this line, hearers techniques used in transporting out undertaking are altering with this environmental alteration. The demand for this research crops up due to extremely competitory and continuously altering concern environment in which the accounting and auditing houses operate. IT has been introduced in hearer s work. In Mauritius, hearers use assorted IT tools to help them in their audit assignments, whereby these houses have considerable resources to pull upon with respect to the development and execution of new audit engineering. Other auditing houses may non hold the resources to get or develop engineering internall y to the same extent as the largest houses. However, scarce literature is available on the perceptual experience of the usage of engineering in the scrutinizing profession in Mauritius. The purpose of this survey is to supply informations viewed from a local position by taking into history the Mauritian s auditing houses civilization, every bit good as establishments, which provides independent hearers with computerized techniques in transporting out their work, so as to bring forth good audit sentiment. Scarlet letter4 EssayCAATs Continuous scrutinizing 3 Data analysis tools- informations use Data analysis tools-sampling Data analysis tools-statistical analysis 4 Continuous scrutinizing Data analysis tools- informations use 5 Data analysis tools-statistical analysis Fraud-monitoring Beginning: Protivit- internal audit capablenesss and demands study on engineering in the audit procedure 1.3.3.3 Auditing Software Used Table 2: States utilizing ACL and IDEA package States Name of package Main map Belgium, Costa Rica, Guinea, Indonesia, Japan, Malaysia, Oman, Papua New, Poland, Switzerland, South Africa ACL Gathering, analysis of informations and informations extraction, trying and describing Canada, Cyprus, Denmark, Grenada, Hungary, India, Ireland, Korea, Norway, Puerto Rico, Saint Lucia, Sweden, Trinidad A ; Tobago, U.K. , U.S.A, Zimbabwe Idea Data Analysis A ; Sampling ( Beginning: hypertext transfer protocol: //www.intosaiitaudit.org/directory/topic/Soft2.htm ) Table 3: Audited account Software Percentage of Use Type of CAATs usage by hearers Percentage of use ( % ) Data Extraction Software 86 Data Analysis Software 94 Fraud Detection and Prevention Software 50 Audit Management Software 78 Hazard Management/Analysis Software 96 Continuous Monitoring Software 38 Beginning: Jackson ( 2004 ) 1.3.3.4 Hearers following CAATs in Mauritius Mauritius supreme audit uses IDEA as it meets the outlooks of clients who invest to a great extent in engineering and want the hearers to utilize it ; increases efficiency and productiveness ; addition clip by automatizing manual undertakings ; performs data analysis efficaciously ; and offers value-added services, such as tendencies analysis, choice samples from general leger minutess, histories receivable outstanding points, stock list points, plus add-ons and paysheet. In 2008 Ernst A ; Young conducted a research, which shows that 42 % of hearers adapt uninterrupted auditing, chiefly to place lacks, proctor hazards and place possible fraud activities. The study besides reports that the grounds curtailing houses to implement uninterrupted scrutinizing are a deficiency of skill sets within internal audit, budget restraints and no sensed value in the plan. S.Williams ( December 2012 ) studies that hearers prefer to go on scrutinizing through manual methods . This is illustrated by the figures of 63 % saying that they would look to use computer-assisted audit techniques, 55 % implementing electronic working documents, 54 % implementing a continuous/real-time audit procedure and 52 % looking to concentrate on informations excavation over the following five old ages. Large clients houses like the Accountant General ( Treasury ) , National Pensions Fund, the Central Electricity Board, Central Water Authority, Customs Department, VAT Department, Income section, and in add-on there are PWC, Baker Tilly Mauritius, Grant Thornton, KPMG are among those houses which implement CAATs ( IDEA ) , already in Mauritius. The paysheet and Treasury accounting of the Government are computerized. As such, hearers deal with soft transcripts or straight from clients systems alternatively of documents. It is believe that in the hereafter old ages, all audit houses will switch to paperless systems altering the nature of audit procedure and obtaining grounds electronically. 1.4 Research Objective ( s ) 1.4.1 Aims of the research This assignment has two overall aims: This assignment examines the engagement and behaviour of hearers in a computerized environment Examines the impact of IT, that is CAATs in the audit process-whether the usage of technology/CAAT efficaciously act as a beginning of audit grounds in order to retain populace s trust in Mauritius Specific aims: To foreground the importance of hearers work and how it is cardinal to the populace To foreground the importance of CAATs in hearers work in today s changing universe To analyze the impacts that CAATs have on audit work To find the extent to which Mauritanian hearers adopt CAAT in their work. To the predating point, the intent of this paper is to look into about the acceptance of CAATs by hearers within different houses in Mauritius. 1.4.2 Intended benefits of the survey To the best of my cognition, in Mauritius, no survey to look into hearers consciousness on the benefits that CAATs can convey to their work and the version of the usage of IT has been done yet. This survey can therefore give an thought on how far hearers in Mauritius usage CAATs and happen it utile than traditional manual paper-based techniques. Through this survey, users of the fiscal statements will be able to acquire an penetration about how efficient and effectual computerized tools are used to supply them with an audit sentiment which is believable. This will guarantee them that necessary controls and stairss are taken to guarantee that audit quality is assured, and therefore minimise fraud such that they can trust on hearers work. Therefore, this survey will profit audit houses as it will let hearers to measure how efficient they can transport out their undertaking with the usage of CAAT. This will let them to convey along other benefits as follows: cut down costs since heare rs work in a paperless environment ; an addition in their audit client satisfaction with a proper manner of maintaining their information firmly ; increased hearers satisfaction and committedness ; better return on investing ; and deriving competitory advantage thereby increasing efficiency. The consequence of the survey may therefore lend positively to the version of CAATs by hearers. 1.4.3 Research Hypotheses From the research objectives, the followers is hypothesized: Ho- The acceptance of CAATs enhances hearers productiveness, by run intoing the hearer s aims expeditiously and efficaciously H1-The version of CAATs does non heighten hearers productiveness, as it can non help hearers in all the audit undertakings 1.5 Research Methodology 1.5.1 Type of methodological analysis to be used and informations aggregation methods Research methods can be defined as the beginning or foundation of cognition in any given field of research ( Dube A ; Pare, 2003 ) . Both quantitative research and qualitative research will be adopted in the survey. Data will be collected from secondary such as articles published by the well-known periodicals, books, and thesiss and primary beginnings via a questionnaire. Before planing the questionnaire, I shall foremost of all get a list of all auditing houses in Mauritius, and take a sample of the whole population, since it will be time-consuming and dearly-won to measure all the houses that exist. The methodological analysis to be used in the survey will dwell of a random sampling among the hearers of audit houses through the disposal of questionnaire and at least three interviews with the directors of three accounting houses. The focal point of these interviews will be to larn which audit engineerings are presently being used, its current impact of engineering on the audit proc edure and to look into their hereafter programs for technological applications for the auditing profession. The research questionnaire will be designed to bring forth consequences that are every bit nonsubjective as possible. Close-ended inquiries included such that to guarantee that full quantitative information was collected. Furthermore, these inquiries will be constructed in the signifier that will let the participant to attach few remarks to back up his/her position on a graduated table provided of 1-7 where 1 indicate wholly disagree and 7 indicating wholly agree. Participants will be asked to give positions sing the usage ofA CAATs ; that is, how do they understand it, and what are their purposes in following these audit techniques. Last the participants were asked to rate the adulthood and use of CAATs within their unit in a graduated table of 1 to 5. 1.5.2 Population or Sampling choice The research population to function the intent of this survey shall be comprised of hearers from different audit houses throughout the island. 1.5.3 Sampling program As to the sample, taking into consideration the clip of the survey, cost and resources available of this survey, a sample size comprising of around 200 Certified Auditors is decided. 1.5.4 Sampling method Random sampling will be used. The single hearers will be indiscriminately selected from both genders and from different parts of the island for the informations aggregation. 1.6 Gantt chart Below is my probationary Gantt chart on how I would finish the different undertakings for my research Column 1 Aug Sept Oct Nov Dec Jan Feb Mar Choice of accounting houses Questionnaire design Pilot proving Administration of questionnaire Methodology Data aggregation Datas Analysis Discussion Finalizing thesis 1.7 Budgeting The demand for doing photocopies of the questionnaires for atleast 200 Certified Auditors will be a batch and to pay for conveyance cost. Outgos Equivalent cost Photocopies Rs 1, 000 Traveling cost Around Rs 500 1 questionnaire contains around 5 pages. 200 transcripts of the questionnaire = ( 5pages x Rs 1 per page ) x 200 = Rs 1, 000 Traveling costs will depend on the location of the houses I am traveling to interview and administrate my questionnaires.