Impacts of Computerisation on Audit Approach

Impacts of Computerisation on Audit Approach

Computerisation has not changed the objectives of audit, but it has fundamentally changed the audit approach.

1. Shifts from transaction-based audit to system-based audit

2. Reduced Audit Trail

3. Increased reliance on internal control

4. Use of computer assisted audit techniques (CAATs)

5. Possibility of Continuous Auditing

Shift from transaction-based audit to system-based audit

Computerisation shift audit approach from transaction-oriented to system-oriented auditing.

What changes

• The manual audit focused on voucher transactions.

• Computerised audit focuses on testing systems and controls.

Reduced Audit Trail

Meaning

Traditional physical records (journals, ledgers) are replaced by electronic records.

Reduced audit trail increases audit risk in a computerised environment.

Impact

• Difficulty in tracing transactions

• less visible evidence

• Greater dependence on system logs

Use of Computer Assisted Audit Techniques (CAATs)

Computerisation necessitates the use of CAATs to improve audit efficiency.

Why CAATs are needed

• Large data volumes

• Speed and Accuracy

• Manual checking impractical

Possibility of Continuous Auditing

Computerisation allows real-time processing and access to data. This enables continuous or online auditing.