These consist of computer programs used by an auditor to read magnetic files and to extract specified information from the files. They are also used to carry out audit work in the contents of the file. These programs are sometimes called enquiry or interrogation programs. They can be written by an audit firm themselves or they can be found from software houses. They have the advantage that unskilled staff can easily be taught to use them.
Uses of computer audit programs:
- Selection of representations or randomly chosen transactions or items for audit tests, e.g. item number 36 and every 140th item thereafter.
- Scrutiny of files and selection of exceptional items for examination e.g. all wages payments over £120, or all stock lines worth more than £1,000 in total.
- Comparison of two files and printing out differences e.g. payrolls at two selected dates.
- Preparation of exception reports e.g. overdue debts. Stratification of data e.g. stock lines or debtors; with a view to examination only of material items.
- Carrying out detail tests and calculations including re-computation of balances.
- Verifying data such as stock or fixed assets at the interim stage and the comparing of the examined file with the year-end file so that only changed items need be examined at the final audit (with a small sample of the other unchanged items). Comparison of files at succeeding year ends e.g. to identify changes in the composition of stock.
- Examination of data is more rapid;
- Examination of data is more accurate;
- The only practical method of examining large amounts of data;
- Gives the auditor practical acquaintance with live files;
- Overcomes in some cases a loss of audit trail;
- Relatively cheap to use once set up costs have been incurred;
- Can be expensive to set up or acquire.
- Some technical knowledge is required.
- A variety of programming languages is used in business. Standard computer audit programs may not be compatible.
- Detailed knowledge of systems and programs is required. Some auditors would dispute the need for this detailed knowledge to be gained.
- Difficulty in obtaining computer time especially for testing.
Use of audit software raises the visibility of the auditor in the eyes of the company. It makes the audit more credible. Deficiencies in the system are often discovered and can be reported to management. This also makes the audit more credible. Packages are not however usually available for small machines