Audit Automation

Automation and rapid developments are affecting all aspects of life and the auditing profession is no exception. Whilst the essential process of the audit is the same the computerized techniques and software available to the auditor have developed significantly.

Useful packages include the following:

  • File interrogation packages, e.g. search sales ledger

  • Audit programme generators

  • Checklist software

  • Spreadsheets for calculations, listings etc

  • Word processors to generate documents and store audit working papers and reports

  • Relational databases

  • Reference information over the internet – all regulations and rules governing auditing and accounting can be searched

  • Systems documentation

  • Risk analysis software

  • Trial balance processors

  • Time management software

File Interrogation software

File interrogation software has been around for a long time. Its principal uses include the following:

  • Totaling and subtotaling files

  • Stratifying and analyzing files

  • Re-performing calculations

  • Producing exception reports

  • Detecting gaps or duplicate entries

  • Selection of audit samples including monetary unit sampling

  • Comparison of information on separate computer files

  • Multiple file format handling, so that client files written in different formats can still be worked.

Automating Procedures

There are obvious benefits in automating audit procedures and these include the following:

  • Files are kept in a more compact form

  • Systems designed for optimal auditing are adhered to by audit staff

  • Automatic generation of audit plans, programmes, schedules and procedures

  • Instant availability of information on a wide range of audit related subjects

  • The creation of data for audit examination or analytical review that is not readily available from clients records

  • Savings due to more efficient working

  • Better compliance with audit firm procedures and ISAs

  • Better Public Relations as clients expect and demand that their auditors are up to date and efficient

  • Freeing audit personnel to think rather than merely to go through procedures

  • Creation of networks so that online supervision becomes possible

  • Rapid sharing of information

As indicated above there are many benefits in automating audit procedures. However automation also brings problems. Increased automation (added to the need for firms to be competitive) may reduce the level if trained and experience staff used on the audit thereby increasing the risk of errors not being detected. Furthermore there is also a danger that automation may result in a ‘standard’ approach to audit work being followed rather than being tailored to the business audited.