Accounting Essay

1874 words - 8 pages

Kudler Fine Foods is a company that uses a significant amount of electronic data and information to flow through their system on a daily basis. The company relies on this data to be accurate and trustworthy. Considering the dependency and importance of the electronic data flowing through the system in such a high volume, they would benefit from computer assisted audit techniques (CAATs). A CAATs audit is focused on testing the computer systems for data integrity and security of the company’s information data processing.
CAATs provide a 10 step process made available to the auditor for use as guidelines in conducting an efficient audit. The guidelines will reduce the time to complete ...view middle of the document...

Computers are a very powerful piece of equipment that over the years have become a part of the day to day operations of just about every business. By definition a computer is a programmable machine that receives input, stores and automatically manipulates data, and provides output in a useful format. (http://en.wikipedia.org/wiki/Computer) Auditors now have software tools and techniques available for all types of audits that they can take advantage of too perform an effective and efficient audit.
Computer Assisted Audit Techniques (CAATs) are used to simplify and automate the auditing process. This is a great way of incorporating data analytics into the audit process. CAATs involve using software, applications, extract and analyze data, trends within data, identify expectations and detention of potential fraud within data. It also provides information that enables details to easily be obtained. By using CAATs the audit documentation and process can be improved with quality and speed. The Information System Auditor will be in control of the selected CAATs.
Audit productivity tools help auditors reduce the amount of time spent on administrative tasks by automating the audit function and integrating information gathered as part of the audit process. First planning and tracking the annual audit schedule using spreadsheets, database, and project management software. Second step is documentation and presentation using word processing, flowcharting and graphics software. Third step, communication and data transfer using electronic connectivity and a centralized server. Forth step, resource management using online work papers review and email. The last is data management using database, groupware, and intranet software.
In addition to the audit plan for the analyzed processes, of Kudler Fine Foods, encouragement of ways to improve audit documentation and process, by using computer technology was addressed to Kudler’s management team. As a result, Kudler Fine Foods management team is considering incorporating proposed computer assisted auditing techniques (CAATs) within its systems. CAATs will increase efficiency levels of an auditor’s personal productivity during analysis and data extraction of the audit which is beneficial to the performance of Kudler. CAAT will also service as a validation agent providing assurance of data integrity and reliability to the operations of Kudler Fine Foods for its users. CAAT surfaces inconsistencies that can be verified timely.
The implementation of industry specific accounting software at Kudler Fine Foods was recommended that would track inventory needs more efficiently as the company was experiencing excessive spoilage of perishable inventory which was the streamline to profitability. The new system managed inventory by automation, POS, and accounts payable/receivable functionalities thus saving money and assisted with better forecasting methods of inventory maintenance. IT audit...

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