Test Data Technique in CAAT

CAAT or Computer Assisted Audit Techniques is auditing techniques that allows the auditor to use the help of computer as an auditing tool to assist them in their auditing procedures. CAAT is classified into three, these are Audit Software, Test Data, and other techniques.

Test data method or test data technique is based on auditor’s creation of input data that should be processed by the client’s application. Test data is consisting of correct and incorrect data. If the auditor tries to input the incorrect data, the auditor will expect rejection from the application. Auditor will then compare the result they get and compare it with the expected behavior from the application. They do this in order to determine whether the application’s input controls are already in place or not.

To minimize the risk of breaking and corrupting the client’s account system, auditors can ask for a special
‘test data only’ processing runs for audit test data. The only downside to this is that the auditor is that the
auditor can’t be really sure that the test data is being process in the same way as the real client’s live data.

To cover this issue, the auditor can ask for permission to the client to establish an integrated test facility
within the accounting system. Test data is divided into two types, these are:

• BCSE (Base Case System Evaluation)
  BCSE or also known as Base Case System Evaluation is a special test data that needs an all inclusive set of test data so that it can test every possible data and processing condition. This method cost a lot of times and money, and best developed by an internal audit staff.
• Tracing
  Tracing is a test data technique that takes step-by-step walk through the application or system.
  – The test data have to be enabled for the whole application
  – Specific data of transaction are created as test data
  – Test data is “traced through all the processing steps of the system or application and a list is produced of all the lines of code as the application was executed.

There are procedures that are needed to be done to conduct CAAT using test data. The procedures are:

1. Predetermined results and expectation
   Before running the application and run the processes, auditors can imagine or create expectation on what will the application do if they input certain data.
2. Run the test deck
   Once the auditors have determined and create their expectation, they can start to input the test data that they have prepared before.
3. Compare
   After they got the result from the application, they will compare the real behavior or function from the application with the one that they have predetermined and expected.

The advantage of using test data technique in CAAT is that the auditors doesn’t need an extensive technical knowledge. Other than that, it is also very simple to conduct and operate and also can help auditors learn how the system operates. However, there are also disadvantage by using this technique. For example, this technique only limited to test of control only. It also has no visible evidence that any audit work performed and it only confirms the operation of the program by the time that the test was conducted.

References:

• Auditing in a computer-based environment | F8 Audit and Assurance | ACCA Qualification | Students |
  ACCA Global. Retrieved 22 May 2022, from https://www.accaglobal.com/in/en/student/examsupport-resources/fundamentals-exams-study-resources/f8/technical-articles/auditing-computerenvironment.html
• Jakšić, D. (2009). Implementation of Computer Assisted Audit Techniques in Application Controls Testing. Management Information Systems, Vol. 4 (2009)(No. 1), 009-012. Retrieved from https://www.ef.uns.ac.rs/mis/archive-pdf/2009%20-%20No1/MIS2009_1_2.pdf
• Test Data Approach. (2016). Retrieved 22 May 2022, from https://www.slideshare.net/kzoe1996/test-dataapproach
• Hall, J. A. (20150811). Information Technology Auditing, 4th Edition. [[VitalSource Bookshelf version]]. Retrieved from vbk://9781305445154