Day 6 (25 Oct 2022)

Mainly, there are two types of work I will be assigned which are ITGC work and CAATs work. For the part of ITGC, I have completed to learn all the things I necessary to learn, it includes to learn the document request list, audit working paper and management letter. Another part is called Computer Assisted Audit Techniques or commonly knows as ‘CAATs’, it is a growing field within the IT audit profession. CAATs is the practice of using computers to automate the IT audit processes. The traditional method of auditing allows auditors to build conclusions based upon a limited sample of a population, rather than an examination of all available or a large sample of data, CAATs then addresses these problems as it is commonly used, is the practice of analyzing large volumes of data looking for anomalies. A well-designed CAATs audit will not be a sample, but rather a complete review of all transactions. Using CAATs the auditor will extract every transaction the business unit performed during the period reviewed. The auditor will then test that data to determine if there are any problems in the data.

So today, I will be focusing to learn CAATs, the first thing I need to prepare in order to learn or carry out CAATs is to install the CAATs software to my laptop. My colleague helped me fill in a request form, then I brought the form together with my laptop to the IT department for the installation, the software BDO using is Interactive Data Extraction and Analysis (IDEA) by CaseWare International Inc. Thao then told me there are a lot of CAATs test, but the most common are: GL test, payroll test, three ways test and aging test. So in these two days, I will be briefed and guided to learn these CAATs test. Thao have sent me two slides which I can refer to. Thao choose to tech me the GL test first, as it is the most complicated one compare with the other tests. There are three objectives for GL tests, which are:

1. Analysis of journal voucher based on parameters or the criteria that is prescribed by the engagement team like rounded journals, posting by risky users.

2. Completeness of journal vouchers.

3. Flag out suspicious offset items in genuine transaction

Next, in order to carry out the test, the document we need to take from client is the geleral ledger (GL), the required fields are: date, JV number, posted GL code, posted account description, amount, posted user, the journal type and the last change time. Other documents we need to take from client is the trial balance, audit trail, super user list and holiday list.

Generally, there are four main steps or procedures we need to follow in order to carry out the GL test, below are the steps and its respective description:

Thao then demonstration once how she conduct the GL test, below are the steps that I have jotted down:

1. Extract a file to our local desktop

2. Check the data given by the client to see whether it is completed or not, if there is something wrong with the data, we need to contact and enquiry the person in charge

3. Do the data cleaning as the data given will not in a form that IDEA can process, we need to arrange it into a form that IDEA can process

4. Clean the trial balance as well

5. Put the cleaned general ledgers and trial balance to respective files

6. Open the IDEA and use the macro to input the cleaned general ledger and trial balance

7. In case there are more then one excel file, use the ‘append’ function to merge them into one file, remember to add one more filed to put the company code

8. Run the macro to generate so called ‘GL_D’ and ‘GL_H’ files, for the trial balance, run the ‘Genereate TB’ macro to generate the so called ‘TB_CDM’ file

9. Click the ‘Run Test’ macro located in the macro file.

10. IDEA will then generate a sheet that will show the variances they got, what IDEA do is it will use the opening balance from trial balance and add up the total debit amount and minus all the credit amount, if the result is different, then there will be variances, the variances need to be further investigate

Thao have stopped until she showed me the step until getting variances, she told me there are further steps need to be done she think it is better she teach me afterward.

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Main things that have learnt

• Understand what is CAAT and its purpose

• Go through CAAT slide

• Learn the general ledger test

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Common/idea/opinion

Thao have demonstrate the whole GL test for me, but I think I need to practice a lot in order to be familiar with it.