Question

The author states the "Audit Methodologies and Software Have a Range of Shortcomings." Discuss this and give an example of when you have had to deal with a software shortcoming and how you overcame the issue.

Answer 1

Audit Methodologies and Software Shortcoming- A Discussion

With the technological age and the advancement of computer in business profession increasing day by day. Accordingly, advancement of auditing technique to evaluate program and transaction have also increasing with gone to an electronic format.

Computer assited audit technique or CAATs allow auditor to review data from the computer application. SO, MANY AUDITOR REFRAME FROM USING CAATs , based on compatibility with the company's computer system.

When an auditor uses CAATs for auditing software, this involve reading the clients data files. By using this procedure, the auditor locate the information necessary to perform diffeent auditing task. But advancement of auditing techniques with software is not free from any pitfall which are as

- Proper training skill needed to run the complicated auditing program

- By using the technique ,it raises the cost of the auditor

-This require advance technology by the auditor and also auditor must be comfortable in using computer software and also to create audit reports.

- IF AN AUDITOR IS NOT FAMILAR , with the system then may have steep learning curve

- Security is also one of the major issue while going audit as paper auditing is different from software auditing

- The IRS internal revenue service and other government agencies may have different rules for electronic record keeping then for paper record.

- Its not easy to convert audit from paperless to technology based.

Remedies to Overcome these Shortcoming

There are various advantage or merits of computerised accounts to auditing, it made easier , cost effective , time effective , and also solve many problem which face in paper auditing , these are some advantages and also remedies to overcome the shortcoming.

- The operating system does all the complex and tedicious task in a simple manner

- The auditors job is also made easier by using advance technollogy

- It helps to save time

- It help to reduce mannual work to a great extend

- It help to the management for arranging reports at a less time and quick action and also be taken

- Decision making plays an important role in top level management by using the software , this becomes easier and with less of time decision can be taken at faster rate with accuracy

- Electronic datab interchange reduce the paper work in auditors office

- The audited balance sheet and other finanacial statement are now accepted by the income tax authhorities

- These audited documents also accepted by the registar of the companies in electronic media

- The real time processing has tremendously improved the stock keeping in the organisation and also real time processing helpfull in share market operation

- Bank balances can be verified and confirmed throgh the process of online