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CMA Intermediate · Corporate Accounting and Auditing · Application of Technology in Audit and Audit Trail

Which of the following is a recognised limitation or risk of using CAATs that the auditor must manage?

The auditor must confirm that the data used in the CAAT is complete and agrees with the client's actual production data. Otherwise conclusions rest on unreliable information. CAATs work on electronic data, still require professional judgement, and can perform recalculations.

  1. ACAATs can only be used on manual records
  2. BSource data given to the auditor must be confirmed as complete and the same as the client's actual production dataCorrect
  3. CCAATs remove the need for professional judgement
  4. DCAATs cannot be used for recalculation of balances

Explanation

If the file extracted for CAAT use is incomplete or differs from production data, the results are unreliable. So the auditor must verify the integrity and completeness of the data used. CAATs do not replace judgement and can recalculate balances such as depreciation or interest.

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