Generalized audit-software

Editor's Notes

• #5: Since GAS can quickly scan, test, and summarize all the data in a computer file, many procedures that ordinarily would be performed on a sample basis can be extended to the entire population. In addition, the use of GAS typically leads to a better understanding of automated systems and computer-based operations. It can make auditing more interesting and challenging and is an excellent way of introducing Auditors to evidence collection process and electronic data file integrity checking within an IT Environment.
• #11: 5. E.g. review accounts receivable balances for amounts over the credit limit and review of payroll files for terminated employees. 6. E.g. changes in accounts receivable balances between two dates can be compared with details of sales and cash receipts on transaction files, and payroll details such as pay rates can be compared with personnel records.
• #12: 7. It is possible to use more than one criterion for sample selection, e.g. randomly select accounts receivable for confirmation. E.g. print customer name, address, and account balance information from master files.
• #13: TASKS PERFORMED BY GAS Analyze a file Select transactions based on logical identifiers Select samples Evaluate samples Print confirmations Analyze overall file validity Generate control totals Perform numerical analyses Perform other tasks Record extraction — Extract (copy) records that meet certain criteria, such as: (1)  Accounts receivable balances over the credit limit; (2)  Inventory items with negative quantities or unreasonably large quantities; (3)  Uncosted inventory items; (4)  Transactions with related parties Sorting (e.g., ascending or descending order) Summarization, such as: (1)  By customer account number; (2)  Inventory turnover statistics; (3) Duplicate sales invoices. Field statistics, such as; (1) Net value; (2)  Total of all debt (credit values); (3)  Number of records; (4) Average value; (5) Maximum (minimum) value; (6) Standard deviation. File comparison, such as; (1)  Compare payroll details with personnel records; (2)  Compare current and prior period inventory files. Gap detection/duplicate detection — Find missing or duplicate records. Sampling Calculation Exportation — Select an application that has been performed using GAS and export to another file format (for additional analysis)
• #14: *Relatively easy to learn and use -Most GAS systems require only about one week of training, and proficiency may be attained after several weeks of use. Furthermore, GAS specification coding, typically requires a fraction of the coding entries needed for conventional programming languages. This permits faster coding and reduces the likelihood of errors. -GAS are developed in such a manner that most of the audit staff can be trained to use the program even if they have little formal computer education. (b) Limited IT expertise or programming skills are required for using GAS. *
• #23: Using GAS to access Simple Structures Accessing flat-file structures (such as text file) is a simple process, as illustrated in the figure above. In this example, an inventory file is read directly into the GAS, which is configured to extract key information needed for the audit, including the quantity on hand, the dollar value, and the warehouse location of each inventory item. The auditor’s task is to perform a physical count of a representative sample of the inventory on hand to verify the existence and value of the inventory. Thus, on the basis of a materiality threshold that the auditor provides, the GAS selects the sample records and prepares a report with the key information.