i. Activities Performed by Audit Team Using CAATs in Client’s Office:

• Data Extraction and Analysis: Auditors can extract data from the client’s system for analysis, enabling them to identify patterns, inconsistencies, and unusual transactions.
• Testing of Controls: The audit team can use CAATs to test the functionality of internal controls within the client’s system, ensuring they operate as intended.
• Recalculation of Figures: With CAATs, auditors can perform recalculations on large data sets, verifying the accuracy of reported figures without manually reviewing each entry.
• Sampling and Verification: CAATs allow auditors to generate random samples of transactions, which they can then review for accuracy and compliance with the company’s policies.

ii. Types of Audit Software in Use in Computer-Based Information Systems:

• Generalized Audit Software (GAS):
  • GAS, such as ACL or IDEA, allows auditors to access and analyze large datasets within the client’s system. It is useful for data extraction, sampling, and data manipulation to conduct comprehensive audits on financial information.
  • Benefits: GAS is flexible and widely applicable across different systems, enabling efficient data analysis and identifying anomalies through customized audit procedures.
• Embedded Audit Modules (EAM):
  • EAM is a type of software integrated directly into the client’s system, allowing continuous monitoring of transactions as they occur. It is particularly valuable for real-time audits and monitoring high-risk transactions.
  • Benefits: EAM offers real-time audit evidence collection, ensuring immediate detection of irregularities and enhancing audit responsiveness in dynamic environments.