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International Journal of Management (IJM)
Volume 11, Issue 5, May 2020, pp. 222-229, Article ID: IJM_11_05_022
Available online at http://iaeme.com/Home/issue/IJM?Volume=11&Issue=5
Journal Impact Factor (2020): 10.1471 (Calculated by GISI) www.jifactor.com
ISSN Print: 0976-6502 and ISSN Online: 0976-6510
DOI: 10.34218/IJM.11.5.2020.022
© IAEME Publication Scopus Indexed
APPLICATION OF COMPUTER ASSISTED
AUDIT TECHNIQUES IN PUBLIC
ACCOUNTING FIRM
Bambang Leo Handoko and Ang Swat Lin Lindawati
Accounting Department, Faculty of Economics and Communication
Bina Nusantara University, Jakarta, Indonesia
Mazlina Mustapha
Department of Accounting and Finance, Faculty of Economics and Management
Universiti Putra Malaysia, Selangor, Malaysia
ABSTRACT
Facing the industrial revolution 4.0, every profession in the world must improve,
every professional workforce involved in it, must begin to add one skill that is
computer literacy. This phenomenon certainly occurs also for the financial auditor
profession. Auditors are required to no longer only carry out the audit process
manually or traditionally but to use computerization. In auditing this is referred to as
computer assisted audit techniques. Our research is a qualitative study, we use
literature studies as secondary data and primary data collection techniques. Primary
data collection is done by observation to public accounting firms and conducting
interviews with auditors to find out how the application of audit software in their
environment. Our interviews include: understanding, constraints faced, and the
auditor's views regarding the audit software itself. In this study we obtained results
regarding the advantages and disadvantages of the computer assisted audit technique
and a review of its application in public accounting firms in Indonesia both the big
four and the non big four. Our research can be a reference or reference for
subsequent research in the field of audit and software.
Key words: Audit, software, industry, technique, computer, assisted
Cite this Article: Bambang Leo Handoko, Ang Swat Lin Lindawati and
Mazlina Mustapha, Application of Computer Assisted Audit Techniques in Public
Accounting Firm. International Journal of Management, 11 (5), 2020, pp. 222-229.
http://iaeme.com/Home/issue/IJM?Volume=11&Issue=5
http://iaeme.com/Home/journal/IJM 222 editor@iaeme.com
Application of Computer Assisted Audit Techniques in Public Accounting Firm
1. INTRODUCTION
Audit is an activity to reveal whether the information or activities that occur are not in
accordance with the benchmarks that have been designed so that it can produce information
about the cause of the discrepancy between the activity and the specified benchmarks. [1],
stated that the audit is selecting and reporting discrepancies between information and
standards through the collection and evaluation of evidence information.
It is undeniable that we live in an era that is fast paced and practical. The need for
computer technology is needed to support daily work from the simplest to the most
complicated. There are three eras of economic growth, namely the agricultural era, the
industrial era, and the information era. In the third era, information technology is very
important because it facilitates and enables companies to collect and analyze data and
information [2].
The practice of accounting implementation in the current era focuses on facilitating the
transformation of resources and methods. This allows the formation of companies on a
network form basis so that there is a fast and large movement of elements.
The development of information technology has led to practicality and convenience in
audit activities, namely Computer Assisted Audit Techniques (CATTs). CATTs is the use of
computer technology in audit activities to obtain audit evidence making it easier for auditors
to collect and analyze electronic-based information. Therefore it is important for auditors to
understand the workings of Computer Assisted Audit Techniques to use and evaluate
electronic-based data.
The Public Accountant Professional Standards (SPAP) also emphasized the need for an
auditor's understanding in examining a computer-based accounting system. This technique is
known as Computer Assisted Audit Techniques (CAATs). The use of CAATs will increase
the efficiency and effectiveness of auditors in carrying out audits by utilizing all capabilities
possessed by the computer. Combining this understanding of the importance of audit
expertise with computer-based information systems knowledge will result in a very
significant increase in the information system audit process [3]. The preparation of
information systems auditors to have these skills must be prepared in advance to be able to
carry out the tasks of an information system audit [4]. Actually in addition to ACL software
there are also other software such as IDEA, CA Panaudit Plus, Monarch Software and many
others, but most of the functions are the same, namely interrogating data that is processing
databases for specific purposes.
There are also considerations in the use of CAATs in every company in Indonesia. If
referring to Public Accountant Professional Standards cited in [5] include also in PSA No. 57
concerning Auditing in a Computer Information System Environment, in paragraphs 04
through paragraph 06 describes the level of skills and competencies that auditors must possess
when carrying out an audit in a computer information system environment and provides
guidance when delegating work to assistants with system skills computer information or when
using work carried out by other independent auditors or experts who have expertise in the
field of computer information systems Specifically, auditors must have sufficient knowledge
to plan, implement and use the results of the use of CAATs. The level of knowledge that the
auditor must have depends on the complexity and nature of the CAATs and the entity's
accounting system [6].
Therefore, the Auditor must realize that the use of CAATs in certain circumstances can
require that he has far more computer knowledge than he has in other circumstances.
The auditor must also consider the suitability of computer facilities and computer-based
business process systems as needed, to be considered by the auditor planning the use of the
http://iaeme.com/Home/journal/IJM 223 editor@iaeme.com
Bambang Leo Handoko, Ang Swat Lin Lindawati and Mazlina Mustapha
CAATs for the client entity, so that the auditor has reasonable expectations that the CAATs
can be used during the audit.
Many computerized systems for carrying out certain tasks do not produce visible
evidence. So in this situation, it is not practical for the Auditor to do the testing manually.
2. LITERATURE REVIEW
2.1. Auditing
According to [7] is a systematic process for obtaining and evaluating evidence relating to
assertions about economic actions and events objectively to determine the level of
appropriateness between those assertions with the criteria that have been determined and
communicating the results to interested parties.
According to [8], in terms of the extent of the audit, the types of audits can be
distinguished from:
1. General Audit, which is a general audit of financial statements conducted by an
independent Public Accountant Office (KAP) with a view to providing an opinion on the
reasonableness of the financial statements as a whole.
2. Special Audit, which is a form of audit that is only limited to the request of the auditee
conducted by the Public Accounting Firm by giving an opinion on the part of the audited
financial statements, for example an examination of the company's cash receipts.
Still according to the same source, according to [8], in terms of the type of examination,
the types of audits can be distinguished from:
1. Operational Audit (Management Audit), which is an examination of a company's
operational activities, including accounting policies and operational policies that have been
determined by management with a view to knowing whether operations have been carried out
effectively, efficiently and economically.
2. Compliance Audit, which is an examination conducted to find out whether the company
has complied with the regulations and policies in force, both those stipulated by the
company's internal parties and external company.
3. Internal Audit, which is an examination conducted by the company's internal audit
department that includes the financial statements and accounting records of the company
concerned and compliance with management policies that have been determined.
4. Computer audit; which is an examination conducted by the Public Accounting Firm of
companies that process accounting data using the Electronic Data Processing (EDP) system.
2.2. Computer Assisted Audit Techniques
Computer Assisted Audit Technique (CAATs) is a technical or virtual technique used to test
internally from an application of a good computer all directly or non-logically used to process
data [9].
CAATs when described simply is the use of computers in auditing activities that are
useful for collecting and evaluating data in the form of electronics in order to be proven audit.
This is needed in order to obtain and evaluate data in electronic form. Therefore, auditors
must know the techniques by which they can experiment with analyzing electronic data called
Computer Assisted Audit Techniques.
CAATs can also be interpreted as the use of certain software tools that are carried out to
test the test of control and the substantive test.
http://iaeme.com/Home/journal/IJM 224 editor@iaeme.com
Application of Computer Assisted Audit Techniques in Public Accounting Firm
2.3. CAATs Activities
Activities that can be carried out with CAATs [10]:
Audit sampling, the computer plays a role in calculating sample parameters, selecting
samples and assessing sample results.
Simulation, the computer is used in assessing software owned by clients.
Collection of data to be tested
Analysis of the analysis
Preparation of examination paper
Calculation, comparison and manipulation of data.
Analysis of calculations
Project information such as budget and time monitoring.
Standard audit correspondence
Check data completeness, consistency, allocation and accuracy.
Check the formula
Comparing data integrity
Overview, sort, merge, split, ratio for data analysis
Comparing data between various audit procedures performed.
3. RESEARCH METHODOLOGY
3.1. Type of Research
The research method used is qualitative research whose research procedures are descriptive
qualitative, namely by studying, describing, analyzing and explaining the data obtained
3.2. Data Source
Source of data used in this study are primary data and secondary data. Primary data is data
obtained directly from the company that is the object of research.
Conducting field research by collecting information directly
Observation directly.
Conduct interviews with related employees/auditor and are responsible for operational
activities in public accounting firm.
Secondary data is information data obtained through documentation such as published
independent auditor’s report, paper from previous study, literature, audit documentation,
working paper [11].
3.3. Data Analysis Method
The data analysis method in data collection used in this study is as follows
1. Literature Review (Library Research)
In this study the authors conducted data collection by reading, searching and studying data
and information both from international journal, books and media such as the internet related
to computer assisted audit techniques.
2. Field Research
In this study conducted in several ways, namely
a. Interview
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