Generalized Audit Software Research Articles

Mis-alignment between IT knowledge/skills importance and IT knowledge/skills integration level into the accounting curriculum in Egypt

Purpose– This paper aims to investigate the alignment between the information technology (IT) knowledge/skills importance or required by the business environment and the IT knowledge/skills integration level in the accounting curriculum in the specific context of Egyptian universities.Design/methodology/approach– Data were collected from a survey of 249 accountant lecturers by emails.Findings– The results indicate that the most important technologies are generalized audit software, embedded audit modules/real-time modules, small business accounting software, computer-aided systems engineering tools, test data and tax return preparation software, and the most technologies integrated in the accounting curriculum in Egypt are wording processing, electronic spreadsheets and electronic presentations. These results mean there is a gap between what is required and what is integrated in the accounting curriculum.Originality/value– This study is the first attempt to investigate the alignment between the IT required and integrated in the accounting curriculum, especially in Egypt.

Understanding the Links Between Audit Risks and Audit Steps: The Case of Procurement Cards

ABSTRACTThis case requires students to conduct an internal audit of a procurement card (PCard) program at a fictitious university. The primary objective of this case is to help students (1) understand the link between risks and controls for a given organization and then (2) link those risks and controls with the appropriate substantive and control tests. Students must complete a Risk-Control Matrix, develop an audit plan, and then conduct substantive audit tests on PCard transactions using Excel or generalized audit software. This audit provides a rich setting for students to complete a variety of real-world audit tasks to identify compliance (or non-compliance) with the PCard Program rules and to prepare business memos to communicate findings. Student feedback indicates that the case not only is realistic, interesting, and a positive learning experience, but also encourages critical thinking. In addition, the case significantly increased students' perceptions regarding their familiarity with PCards, use of generalized audit software (GAS) in compliance audits, and understanding of internal audit uses of GAS.

The utilisation of generalized audit software (GAS) by external auditors

Purpose – Generalized audit software (GAS) is the tool use by auditors to automate various audit tasks. As most accounting transactions are now computerized, auditing of accounting data is also expected to be computerized as well. While GAS is the most popular of computer assisted audit tools and techniques (CAATTs), research shows that there is little evidence that GAS has been universally adopted by external auditors. The purpose of this paper is to investigate the utilization of GAS by external auditors in the UK. The paper focuses on small and medium‐sized audit firms in the UK whereas most other GAS studies have examined “Big 4” firms. Registered statutory auditors have been selected as a sample.

Auditing Operational Compliance: The Case of Employee Long Distance Piracy

ABSTRACT: This case provides an active-learning opportunity for students to assume the role of an internal auditor conducting a compliance audit. Specifically, we provide students with the actual telephone records of a firm with a policy prohibiting employees from using company phones for personal long distance calls. The case exposes students to (1) using generalized audit software, (2) validating data (for potential anomalies) before performing analysis, (3) analyzing nonfinancial information, (4) converting nonfinancial information into financial impact (i.e., the cost of the nonbusiness long distance phone calls), and (5) writing a business letter outlining the findings of the compliance audit and recommendations. Students must understand the data, analyze it, interpret the results, and develop recommendations. Given that most shareholder value is lost due to strategic, operational, and business risks, rather than financial risks, audit committees and senior management are now putting pressure on internal auditing to shift its focus from financial compliance auditing to nonfinancial concerns. This case helps students gain the necessary skills to conduct these non-SOX audits.

Blazer Communications: A Procurement Audit Simulation

ABSTRACT: This case presents an introduction to conducting audit procedures and drafting audit observations as part of a business process audit. Using a book wholesaler as a context, the Blazer Communications procurement audit case is aimed at providing students with a realistic setting to conduct audit procedures expected of interns and entry-level auditors. Students execute a test plan as part of a procurement process audit, evaluate audit evidence, propose audit observations based on exceptions, and utilize subscription-based online internal audit/risk management services to participate in risk assessment planning activities and to suggest supplemental audit procedures. Audit evidence (interview recordings, policies and procedures manuals, process maps and narratives, transactional data) is provided in a variety of formats to increase assignment realism and allow flexibility in assignment completion. The case is appropriate for students with basic generalized audit software and database querying proficiency. The case is appropriate for undergraduate or graduate students in internal and external audit courses. Transactional data files are supplied in both Microsoft Access® and Excel® formats; interview files are supplied in MP3® file format.

Implementing Generalized Audit Software in the Classroom

Abstract This paper describes resources designed to help instructors easily integrate the leading generalized audit software (GAS) packages, Audit Command Language (ACL) and Interactive Data Extraction and Analysis (IDEA), into their classes. Specifically, we provide project assignments, exam questions, as well as teaching notes describing implementation issues. The projects require students to: (1) evaluate sales and accounts receivable data, and then create confirmation letters by exporting data from GAS and then importing it into word processing software for a mail merge, (2) use inventory, accounts payable, and payroll data to work with expressions, filters, data extractions, and relations between tables, and (3) import a database and prepare several reports. We also present student self-assessment data on their ability to use GAS as well as their understanding of the general benefits and applications of GAS. The evidence suggests that hands-on projects can improve perceived knowledge of GAS regardless of student background, course format (group versus individual projects), or teaching method (self-study versus lab-time).

Developing A Continuous Auditing Assistance System Based on Information Process Models

In recent years, Continuous Auditing (CA) has become an inevitable trend in current business environment. Computer-aided auditing systems, such as the Generalized Audit Software (GAS), are widely used to complete this task. However, most auditors who are not equipped with IT backgrounds have great degree of difficulty in integrating computer-aided auditing system with their professional knowledge in auditing. This limitation greatly impairs the auditors' ability to independently and continuously performs tests in the CA environment.This study proposed a systematic analysis approach to assist auditors in bridging the “semantic gap” between the information system and auditors' specialty. This proposed approach first provides a framework for auditors to effectively understand business processes and data flow/data structure of information systems. These ingredients are then mapped into the process of auditing including auditing objectives, key controls and auditing rules by employing information process models such as Use-case Diagram, Data Flow Diagram, and Entity-Relationship Diagram. With this approach, auditors can independently design auditing rules which can be automatically embedded in the database. Auditors can also perform auditing tasks independently on a real-time basis and reach the objectives of Continuous Auditing.

Employing generalized audit software in the financial services sector

PurposeComputer assisted audit techniques (CAATs) encompass a range of computerized techniques that internal and external auditors use to facilitate their audit objectives. One of the most important CAATs is generalized audit software (GAS), which is a class of packaged software that allows auditors to interrogate a variety of databases, application software and other sources and then conduct analyzes and audit routines on the extracted or live data. This study seeks to evaluate the nature and extent of the utilization of CAATs in financial institutions. In particular, the study establishes the extent and nature of use of GAS by bank internal auditors and their external auditors. The study is conducted with large local and international commercial banks in Singapore, a major financial center. Given the limited research on GAS in general and in the financial services sector in particular, the study uses exploratory qualitative research.Design/methodology/approachQualitative research employing depth interviews with internal and external auditors of financial institutions.FindingThe research finds that the extent and range of use of GAS varies widely between the institutions in the sample. Internal auditors see GAS primarily as a tool for special investigations rather than as a foundation for their regular audit work. External auditors make no use of GAS, citing the inapplicability of this class of tool to the nature of testing the financial statement assertions or the extent or quality of computerized internal controls maintained by the bank.Research limitations/implicationsThis is a small sample study. While the data are rich, the findings cannot necessarily be extrapolated to broader populations.Practical implicationsThis study provides guidance on the role that CAATs play in the audit process of financial institutions that is relevant for the audit community.Originality/valueThis is the first in‐depth study of the application of CAATs to financial institutions.

Selecting an Audit Software Package for Classroom Use

External, internal, and government auditors increasingly use audit software to improve the efficiency and effectiveness of audits. Incorporating technology such as generalized audit software into the classroom not only exposes students to “tools of the trade,” but, more importantly, also facilitates student learning of audit concepts and procedures. The purpose of this paper is to provide information on two audit software packages, ACL and IDEA, so that instructors can evaluate the appropriateness of including one or both of these packages in their courses. We compare the packages from both a functional and pedagogical perspective, describing several uses in the classroom. We also provide student and instructor feedback from package use. An accompanying web page provides numerous resources for instructors considering adopting ACL or IDEA, including exercises, exam questions, slides, review questions, and syllabi.

Computer‐assisted audit tools and techniques: analysis and perspectives

In light of the increasing demand on auditors to make the audit more effective and efficient, this paper presents a brief summary of the most prominent computer assisted audit tools and techniques (CAATTs), which auditors can use to increase audit efficiency and effectiveness. Additionally, the results of a survey of governmental auditors which inquired about their perceptions of a specific type of CAATTs (generalized audit software proxied by the use of Audit Control Language or ACL) are presented. Results show that auditors seemed to perceive the potential benefits associated with ACL; however, they displayed a lower confidence in their technical abilities in using the application. Also, the auditors surveyed expressed a desire to increase their skills through increased ACL training. Taken together, these results give audit decision makers evidence that additional technical training is needed and desired by auditors.

Auditing with technology: using generalized audit software in the classroom

Over the past decade, improvements in generalized audit software have created a situation in which auditing “through” the computer may be both more effective and more efficient than in the past. This paper describes a series of assignments that allow an instructor to bring a meaningful application of generalized audit software to the undergraduate auditing classroom. The assignments we have developed are meant to supplement traditional audit coursework by providing students an experience of applying audit procedures electronically.

Information Systems Controls and Auditing: Mathra Tool, Inc.

Mathra Tool, Inc. (MTI) is a small business manufacturing case. It can be used by undergraduate or graduate students studying management controls and auditing in a computerized setting. Students integrate accounting, auditing, and information systems concepts. They identify and assess controls to set detection risk and suggest the nature, extent and timing of detailed tests for generalized audit software. They then prioritize weaknesses in internal control, separating reportable conditions from other improvements. MTI is particularly topical, in the light of SAS No. 80, Amendment to Statement on Auditing Standards No. 31, Evidential Matter, effective for financial statements beginning on or after January 1, 1997. This SAS recognizes that both electronic and paper evidence needs to be considered when conducting risk assessments and during the evidence-gathering process. Instructors can discuss concepts of activity-based costing (due to inappropriate overhead application) and additional types of EDI beyond the stand-alone EDI method used by MTI.

EDP auditing instruction using an interactive generalized audit software

Most auditing curricula do not provide students with experiential reinforcement of auditing and/or computer auditing concepts. This paper reports on an interactive generalized audit software package that has been designed to fill this educational void. The TREAT package consists of four different modes of operation with four audit eases that enable students to gain hands-on audit experience. The features of the TREAT package are similar to many accounting firms generalized audit software packages. Students using the package and its audit cases have proven TREAT to be an effective and efficient pedagogical tool.