AUD 689 ADVANCED AUDITING

WWW CIS QUESTIONS

Class : AC2208H
Prepared by:
Nur Syafiqah binti Hamdan (2016338303)
Nor Alia binti Mat Rofi (2016341289)
Nur Syafrina binti Allaudeen (2016317417)
Nor Muhammad Al Amin Bin Azman (2016706413)

QUESTION 1

a. Provide six (6) examples of potential CAATs that could be used to assist with the audit
of stock balances of Vena Bhd.

b. Give four (4) reasons why you might not use CAATs.
There are a few reasons why I might not use CAATs as follows:
- It is very difficult for a computer system to make a professional judgement.
- Requires intensive training for auditor to adapt the system
- Less use of CAATs in assisting programs in the final results of audit
- Lead to high costs in time and money for auditing firm in adapting CAATs
- Requiring frequent updates and customization to preform proper audit procedures.
- Potential for corruption of client data and difficulties in removing test data from client
system.
- System features such as lack of visible audit or transaction trail.
- Computer knowledge of the audit team is not strong enough to use CAATs.

c. Explain the Five (5) potential benefits of using CAAT.

d. Describe Five (5) disadvantages of CAAT.
QUESTION 2

(a) Define CAAT

(b) Assume your IT audit division is to perform testing of controls for the inventory
systems described. Identify three (3) tests that you would recommend they perform.
There are a few tests for the inventory systems, such as:
- Test inventory in transit.
o The auditors will test by reviewing and checking all transfer documentation
because there is risks that inventory in transit from one storage location to
another at the time of physical count.
- Test item costs.
o The auditor needs to know where purchased costs in client’s accounting records
come from. Thus, the auditor will make a comparison the amount in recent
supplier invoices to the costs listed in client’s inventory valuation.
- Test error-prone items.
o The auditor will do re-test for specific inventory if the auditor found an error
trend in prior years.

(c) Identify three (3) Computer Assisted Audit Techniques (CAATs) that you would
request the IT auditors run to assist you in testing the valuation of inventory.

(d) Assume your IT auditors ran a CAAT on inventory data contained in MyHaiwanku
management accounts. You intend to use this data to assist in your analytical procedures
work. Identify three (3) tests that you would perform on the data produced by the CAAT,
prior to placing reliance on the data.