What is CAAT?
CAAT stands for “computer assisted audit techniques”. This basically means that the audit team performs audit testing through the computer rather than going around the computer.
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What does it mean to audit around the computer?
Auditing around the computer is when the audit team doesn’t inspect IT system controls. Instead, they obtain source documentation from the system (i.e. system reports) and compare that information to the financial statements. Unless the audit team has specific IT knowledge, this is the route most audit teams take as its less complex.