Audit Automation in Contemporary Organizations

By- Md. Zahid Kalam BBA ( major in MIS), DU

Extract: Todays business processes are so complicated and dynamic that

the professionals have to remain updated and well-informed of the latest business events and technologies whenever these take place. Audit Automation is such a latest technology that must be informed to the business professionals. An attempt has been made to introduce the audit automation technologies to the auditors and related professionals through this study. Presently most of the business processes are going automated day by day and it has become essential for todays professionals to get informed of the uses and importance of the latest tools and techniques of Automation. Audit Automation can be a competitive advantage for any organization in the business world including Bangladesh because its a new concept yet it is an effective and efficient mechanism for audit. It provides quality in the activities of Audit while the auditors perform functions with least time and effort. At ACNABIN the basic procedures and activities of Audit are followed but the ways of performing the audit is not consistent with latest technologies and systems performed in the client organizations. In this report it is attempted to present all the existing tools and software that are useful in performing audit procedures quickly, efficiently and effectively. Todays auditors must be aware of such type of tools and software so that they can perform their audit procedures effectively and efficiently.

Chapter 1 INTRODUCTION

Audits are performed to ascertain the validity and reliability of information as well as to provide an assessment of a system's internal and external control. The goal of an audit is to express an opinion of the person / organization / system (etc.) in question, under evaluation based on work done on a test basis. Heres we find the close relation of Audit and Information Systems and it would be great if anyone can establish a link between Audit and Information Systems which will eventually lead to implications of Management Information Systems in Auditing. Thats why todays auditing firms are constantly trying to establish a viable Information systems in their organizations in order to increase their efficiency and accuracy of their work. For example, ACNABIN Chartered Accountancy firm of Bangladesh is planning to establish an integrated information systems for the Verification of Alternative Cash Assistance files which they believe will enhance their ability to work efficiently and accurately. There have been two key drivers to the increased adoption of automated systems. Firstly, the technology has become sufficiently advanced to enable sophisticated automated systems to be easily accessible both in the office and from client sites. In addition, storage capacities have improved to such an extent that storing large amounts of detailed audit data electronically for several years no longer poses problems. The second reason is the increasing pressure auditors have faced to improve efficiency and profitability, while at the same time improving standards of audit work, following the introduction of International Standards of Auditing (ISAs) in 2005. The ultimate focus of this report is on the automation of the activities performed in Auditing.Increased globalization of businesses, market pressure to improve operations, and rapidly changing business conditions are creating demand for technology-enabled auditing (TEA) to ensure timely ongoing assurance that controls are working effectively and that risk is properly mitigated.There are some important tools and Software that are constantly used for Audit automatically through the world such ascomputer-assisted audit techniques (CAATS), Audit Command Language(ACL), Interactive Data Extraction and Analysis(IDEA), ESKORT Computer Audit (SESAM), ActiveData For Excel,Active Datafor Excel, CorpSystem Active Data, Monarch , Picalo, qzCAATTs, countTXTDB Secrets etc.Some of the key benefits of Audit Automation are Reduced Audit Cost, Improved Audit Quality, Improved Operational Effectiveness, Reduced fraud risk, keeping auditors connected, Managing the work flow effectively, Activity history monitoring, tracking the issues that are related and so on. For this reason, I tried to convey an important message to the current and potential auditors of the contemporary organizations through this report.

1.1 Rationale Of Study:

So far I know , no earlier research in Bangladesh has yet been conducted on this area. Thats why I am interested to work on the prospects and challenges of Audit Automation. From the very beginning of my life I had a fascination to the procedures of Auditing and at last I got a chance to do something like Auditing. But as a student of MIS, there I felt the dire need of an effective information that would help both the clients and the auditors to perform their respective duties more effectively, more quickly, more accurately and most efficiently. Besides, for a few years now, the concept of "paperless offices" has hovered on the horizon, but while technologies such as word processing and accounting software have revolutionized office life, paper-free working has never fully materialized. However, among auditors at least change really is afoot,
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with growing numbers switching to paperless audit automation systems. In the past three years alone, the number is estimated to have jumped eight-fold. Firms of all sizes are now taking the plunge. The structure of audit work and the need for high levels of consistency and quality control mean that it lends itself to automation. Automation software cannot do all the hard work for you; nor will auditors one day be replaced by computers. What it does mean is that the risk of errors and omissions can be minimized while at the same time improving efficiency. All the various procedures and documentation auditors need to address and create in a structured environment are brought together in a logical, consistent and well-thought out on-screen framework. The internship program is a mandatory requirement for the students who are graduating from the BBA Program under the faculty of Business Studies of Dhaka University.In the internship program I was engaged in a host firm named ACNABIN & Co. for three months period. During this period, I have learned how an audit is conducted. I also learned about the audit procedures of CA firm and how the engagement is done in case of an annual audit. At that time I got the opportunity to audit the Financial Statements of two branches(Agrabad br. &Khatungonj br.) of One Bank Ltd. I also audited the Cash Incentives files of Jute, Composite, Pet bottle, Leather, Shrimp of One Bank Ltd. And Agrani Bank Ltd. There I felt the necessary to Automate the audit procedures of those Banks and I tried to develop some Ideas and concepts of how we can develop a system that will increase both the quality and Efficiency.

1.2 Objectives of the Study:

Most of the business processes today are automated to various degrees and businesses continue to invest in maintaining and expanding this automation through the acquisition of computer and telecommunication technologies and various enterprise systems such as Enterprise Resource Planning(ERP) , Supply Chain Management (SCM), Partnership Relationship Management(PRM), Customer Relationship Management (CRM), Data Mining etc. Such automation of business processes has led to compulsory changes in Auditing procedures, standards and Processes. The overall objective of the present study is to analyze the prospects and challenges involved with the development, implementation and promotion of Audit Automation as well as the necessity of Audit Automation in Bangladesh. To accomplish this, the study has covered the following objectives: To identify the basic tools and software used for Audit Automation To identify the key benefits of Audit Automation. To identify the key requirements of development and promotion of Audit Automation To identify the limitations and major drawbacks of Audit Automation. To recommend some strategies for the development and promotion of Audit Automation based on my findings.

1.3 Scopes of the Study:

Major parts of scope are point out below: a) b) c) d) e) f) Background of the host organization and also their position. Audit procedure, which is followed by the organization for performing any audit. Nature and importance of it has depicted in this study. Audit methodology of the firm, which is followed by the organization for performing any audit. Audit administration of the firm, which is followed by the organization for performing any audit. Annual Audit Procedures of Financial Institutions like Banks and Non-financial institutions as well.

1.4 Research Methodology

The outcome of the study is qualitative. But this is also an exploratory research basically utilize the unstructured research methodology. This type of research required much information in order to make the report effective or meaningful. In this study an attempt has been made to include the latest information regarding the available and prospective tools and software for audit automation and their uses. In order to prepare the assigned project paper, collected necessary data from two types of sources as follows: 1) Primary sources data 2) Secondary sources data

1.

Primary Data:

The primary data has been collected from original sources by the researcher through field operations. The primary data are those which are collected a fresh and for the first time and are original in character. So, the primary data are assembled from the first hand field investigation. I collected primary data working with different audit teams through field operations. I gathered experience on this matter by Working experience with the different audit teams of ACNABIN & Co. during my internship period. In order to collect first hand data I discussed the matter of Automation with the various officials of ACNABIN including the Partners, the Managers, the Senior Audit staffs, and the articled students of the Firm. I discussed the matter with my clients ( One Bank Ltd. &Agrani Bank Ltd.) including Vice President, Principal Officers of the two banks concerning the matter of Audit Automation and they respond positively regarding the matter.

2.

Secondary Data:

The secondary data, on the other hand, are those which have already been collected by someone else and which have been collected through the statistical process. Secondary sources of data consisting of all published and reported materials including books, journals, articles etc. I have collected secondary data from the annual audit report, management audit report, accounting system & audit working papers audited by the ACNABIN & Co. I have also collected secondary information from the different publications of different universities and different institutions like Institute of Chartered Accounts(ICAB) and Institute of Cost and Management Accountants (ICMA). Other information was obtained from various corresponding files of the firm and various relevant books mainly Bangladesh Standards on Auditing (BSA).Different types of websites regarding Automation of Audit also helped me a lot. I also collected secondary data from different types of articles related to the automation of different business processes. Finally the collected data have been analyzed with respect to the objectives of the study.

1.5 Organization of the Report :

This report comprises five different chapters in which each of the chapters contains different flavor of study. The first chapter includes the introduction of the report. In this chapter I tried to discuss the concept of audit, the objectives of the report i.e. for why am I going to prepare this report, the scope of the report, the rationale of study etc. I attempted to prepare this report because so far there is no study done for audit automation. I felt the dire need to inform the todays auditors and contemporary organizations of the latest concepts of audit automation and its use and importance. In the second chapter, I attempted to present the organization where I have performed my internship period. I have discussed the nature of the organization, the partners of the organization and their experiences, the human resource of the firm, the services they provide, the background of the organization , their head offices and their branches, what I have learned from them etc. In the third chapter I tried to introduce the concepts of Audit Automation, their importance in the contemporary organizations, the drivers and forces that work behind this concept etc. The tools and software used for Audit Automation and the benefits gained from those are discussed in this chapter. In the fourth chapter, the findings are analyzed e.g what are the benefits of using Audit Automation and what are the limitations that exist in developing and maintaining an effective Audit Automation. In this chapter I attempted to provide a flavor of SWOT analysis for using Audit Automation in an organization like ACNABIN. Last of all, a conclusion is drawn and I attempted to provide some recommendations based on my findings and analysis.

1.6 LIMITATIONS OF THE STUDY: The study is conducted with an objective to make a thorough study of the overall procedures, practices, standards, processes and importance of Audit Automation that have been availed many facilities and faced some obstacles during my study as well. These obstacles may be termed as limitation of the study. These limitations are as follows: a)Audit automation is totally a new concept in Bangladesh.As a result I had to go through an unending attempt to collect the recent information. Nevertheless, I hardly find any perfect sources that can provide me accurate information and I think its a kind of limitation for the study. b)As the internship was the first practical experience, not everybody was so interested to provide confidential information regarding the exact procedures of Audit Automation but I tried my best to enrich the study. c)The depth analysis has been limited to the extent of information. d)Audit automation is yet to be practiced by the contemporary organizations of Bangladesh.

Chapter 2 DESCRIPTION OF THE ORGANIZATION

2.1 Profile of the Firm:

Profile of the Firm

Name of the Audit Firm ACNABIN Chartered Accountants Date of Establishment Address of the firm Telephone, Fax & E-Mail 15th February, 1985 BDBL Bhaban (13th Floor) 12, Kawran Bazar Commercial Area Dhaka-1215, Bangladesh Phone: 880-2-8144347-52 Fax #: 880-2-8144353-54 E-Mail: <[email protected]> Web site: www.acnabin-bd.com. House # 734, Road # 26 CDA Residential Area, Chittagong.

Branch Office

2.2 Background:
ACNABIN was founded by Seven renowned Fellow Chartered Accountants in 1985. The name ACNABIN comes from the acronyms of the founder partners: A C N A B I N = ABM Azizuddin = AnwaruddinChowdhury = Abu Syed Mohammad Nayeem = Mohammad Akhtaruzzaman = ATMA Bari = IftekharHossain = Mohammad NurunNabi.

At present the partnership comprises four founder partners and two new partners. ACNABIN represented BDO in Bangladesh during 1990-92 and Arthur Andersen from 1992 till the later collapse in 2002. Registration of Firm: ACNABIN & Co. Chartered Accountants Firm is registered under The Institute of Chartered Accountants of Bangladesh in the year 1985. Age of Firm: 26 Years from 1985. Nature of Firm: ACNABIN & Co. is a Partnership firm, since it consists of seven partners.

2.3 Associations:
a) Associated with ASNAF-ASEAN Accounting Firms, Singapore since 18 February 2003. b) USAID and EC Enlisted: In 1993 they have been enlisted by the United States Office of Regional Inspector General/Audit, Singapore to perform financial audits of USAID fund recipients in Bangladesh. We have been also enlisted by the European Commission to conduct financial audit of the recipient of their fund. c) In July 2005 ACNABIN achieved Representative Firm status of BAKER TILLY INTERNATIONAL: BAKER TILLY is an independent member of BAKER TILLY International. BAKER TILLY International is a network of high quality, independent
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accountancy and business service firms, all of whom are committed to providing the best possible services to their clients, in their own marketplaces, and across the world, wherever the client needs help. BAKER TILLY International is the 8th largest network in the world by fee income and is represented by 122 firms in 75 countries, with a global aggregate fee income of US $1.82 billion and 18,600 staff worldwide. In 2003, the network experienced a 17% growth in revenue.

2.4 Membership:
ACNABIN is the member of: a) b) c) Metropolitan Chamber of Commerce and Industries The Dhaka Chamber of Commerce and Industries American Chamber of Commerce in Bangladesh.

The firm has one office in the capital city of Bangladesh with four different Divisions to manage its day to day activities. The divisions are:

Auditing, Income Tax, Consultancy Services, and Insolvency.

2.5 Existing Partners and their area of Specialization:

Area of Professional Name ABM Azizuddin Mohammad NurunNabi IftekharHossain A.S.M Nayeem M. Moniruzzaman Md. MominulKarim Md. Rokonuzzaman Office Primary Dhaka Office Dhaka Office Dhaka Office Dhaka Office Dhaka Office Dhaka Office Dhaka Office Audit Audit Consultancy Audit Audit/Tax Audit Audit Secondary Consultancy Consultancy Audit Tax Consultancy Consultancy Consultancy

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2.6THE ACADEMIC AND PROFESSIONAL QUALIFICATIONS OF PARTNERS:

Name ABM Azizudddin IftekharHossain ASM Nayeem

Education and Qualification B. Com. (Hons.), M.Com., FCA B.Com., FCA

ICAB registration no. 46 150

B.Com (Hons), M.Com, M.Sc (UK), 353 FCA, FCCA B.Sc., FCA B.Com., FCA 370 739

Mohammad NurunNabi Md. Rokonuzzaman M.Com., FCA

Md. Monirruzzaman Md. MominulKarim

B.Com. (Hons.), M.COM., FCA B.Com.(Hons.), M.Com., ACA

787 934

External Activities Of The Partners:

Mr. ABM Azizuddin, FCA, one of the founder partners was the President of The Institute of Chartered Accountants of Bangladesh (1990) and presently a council member and the Chairman of Board of Studies. Three other partners are involved in different committees of the Institutes. MR. IftekharHossain is now working as administrative partner of ACNABIN.

Experience of the Partners:

ACNABIN partnership came into being in February 1985, with a mission to continually add value by helping clients succeed. The long and diverse professional background of the individual partners in academic, administrative, audit, consultation, privatization, system design (computerized and manual), taxation, feasibility study, cost and management accounting and budgeting fields have been brought together to establish a multidisciplinary organization. All the partners of the firm have an in-depth experience of working in Bangladesh and with international/foreign consultants/ organizations working in Bangladesh and overseas. The diverse and wide exposure of the partners helps to deal effectively with most of the complex situations faced by business enterprises in today's competitive world, both in the developed and developing countries.

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2.7 Achievement of the Firm:

(i) A Brief statement on the outstanding activities and innovation by ACNABIN: ACNABIN Introduced stipend to attract brilliant students to the profession of accounting in Bangladesh. It has introduced and implemented several forms for an effective audit field work. It is considered to be the market leader in audit and evaluation of microfinance organization. (ii) Services rendered abroad: Since its incorporation, ACNABIN has successfully performed the following overseas assignments: Qinghai Micro-credit Project, China. Consultancy assignment on Accounting in DPR of Korea. Financial Analyst for Operational Performance of Nirdhan, Nepal, Funded by World Bank-CGAP Study of Micro-Finance Institution Capacity Assignment, Kuala Lumpur, Malaysia. Verification of Financial and Accounting System of Rural Credit Operations of Bhutan BDFC, Thimpu, Bhutan. Vivekananda Sava Kendra O SishuUddayan, West Bengal, India. Capacity Building of External Auditors for Micro-finance Audits, an ICPAU workshop held in Kampala, Uganda under the sponsorship of CGAP. Training on external audit of micro-finance institution in Addis Ababa, Ethiopia, sponsored by the Association of Ethiopian MFIs (AEMFI).

(iii) Hosting of International Internship: During October-November, 2001, ACNABIN has hosted an International Internship program for two (2) employees of Bank of Indonesia, Indonesia on External Audit of Micro finance Institution in Bangladesh. (iv) Firm ranking by fee size for city and/or country: Bangladesh Bank, the Central Bank of Bangladesh Government has placed ACNABIN in the 2nd position out of 82 enlisted firms. There are total 174 audit firms in Bangladesh, of which five (5) firms have 6 or more partners and ACNABIN is one of those 5 firms. (v) Publication and manuals used internally by the firm: ACNABIN has developed the following two manuals which are extensively used by the ACNABIN staffs: a) b) Audit Manual Staff Manual

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2.8 Human Resources:

The number of personnel available with the firm are as follows: Partners * Professional Staff : - Directors/Qualified Assistants - Audit Senior - Articled Students - Probationers - Support Staff Total 07 07 38 184 50 28 314

2.9 Logistics Supports:

We have ample equipment and appliances in our stock to give logistic support to our clients enhanced requirements. Office space Computer Laptops Laser Printer Photocopier Multimedia projector 4500 sft. 24 nos 20 nos 5 nos. 2 nos. 2 nos.

List of important industries in which the firm has experience 1. 2. 3. 4. Banks, Micro-Finance Institution (MFI), Non-Government Organization (NGO), Donor funded projects e.g. projects funded by USAID, CIDA, DFID, NORDA, SIDA 5. Multi-National Companies. At present ACNABIN have some 120+ audit clients. As one of the top four firms in Bangladesh ACNABIN have audit clients of all type, e.g. public, private, governmental, profit/non-profit organizations. ACNABIN have several clients with international operations.

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2.10 Services Offered:

The services that are offered cover the following areas: Feasibility study Management consultation/development Statutory audit Accountancy Taxation Accountancy and management training System development Data processing with computer Privatization consultancy (Include pre-privatization review, restructuring, valuation in particular and privatization assistance in general) Other accounting ancillary services including investigation, internal and management audit. Micro- finance consulting. Human Resource Development Issues Organizational consulting services Designing computerized systems for MIS and accounting and its implementation Share/ business/ asset valuation.

2.11Analysis of Total Practice Turnover:

Audit Accounts preparation (including data processing and book-keeping) Tax Insolvency Financial Advisory Services Management Advisory Services Total 40% 5% 15% 10% 20% 10% 100%

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2.12 Quality Control and Independence:

Hiring of professional staff: Professional staffs are recruited based on their academic result, recruitment test, interview and referrals. i. Training:

In May 1994, two of our partners actively participated in a workshop on Supreme Audit Institution held in Singapore. In January 1997 also our firm participated in the training workshop held in Bangkok on USAID Rules and Regulations. In March 1998, partners along with two other senior staff members took the opportunity to participate in the training course on Procedures for Procurement and Disbursement under the World Banks Financed Project held at BRAC Centre, Rajendrapur, Bangladesh. This is a part of a continuous process for updating the knowledge in its concerned spheres of work and also to widen the horizon of latest know how. ii. Training of staffs on the firms audit procedures: ACNABIN gives out a package on firm audit procedure, office procedures to the newly recruited staffs. Also, through the weekly training classes partners / managers briefed new staffs about the firm and its procedures. The firm also makes available the information about current developments in professional technical standards to all professional staffs through office circulars and notice board display. Firms audit methodology is being taught through on the job training and through the weekly training classes presenting the real life situations, problem solutions and discussion on the current audit clients. Firms ethics and independence are being communicated to the staffs through the weekly classes, office memo and continuous monitoring by the senior partners. Students, staffs are taught on the International Accounting Standards as adopted by SEC and ICAB and locally applicable GAAP in the weekly training class, on the job training and by the quality control review discussion. Students, staffs at ACNABIN are informed on the changes in auditing and accounting standards through weekly class, office memo, distribution of related books and continuous monitoring by the senior partners. iii. Activities performed by ACNABIN to recognize that the quality is essential when performing the engagement: Partners personally work on the assignment, sometimes on a full time basis. All audit reports are reviewed by a Concurring Partner in addition to the Engagement Partners.
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 Disciplinary action is being taken in case of non-compliance of the uniform standards followed by the firm. Students and staffs with quality performance are appreciated with better financial remuneration, assignment to important and quality clients. Students and staffs who are guilty of non-compliance are subject to disciplinary action. iv. Review of the work performed: Supervisors, managers as well as partners perform field visits, review of work papers and make a list of review points. Review on each and every audit by second partner is done at the office after the preparation of draft report. The procedures documented and made available to all staffs. ACNABIN follows the professional standards issued by the International Federation of Accountants (IFAC) as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB). ACNABIN has an audit manual which incorporates all the principles and policies as issued by IFAC and translating those principles into procedures and forms.

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2.13 Organizational Hierarchy of the ACNABIN:

The Organizational hierarchy of ACNABIN can be shown by the following diagram:

Partners

Audit Managers / Tax Managers Directors Administrative Officer

Deputy Managers IT Officer Finance Officer

Sr. Assistant Mangers

Sr.Articled Student

Jr.Articled Student

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ACNABIN
Audit Administration

Audit Stages
1.

Responsibility

Planning
A.

New Client
i. ii. iii. iv. Putting a job number Familiarization with clients business Familiarization with clients accounting and other related work Preparation of planning memo: a. GRA memo b. Client profile c. SRA memo v. Preparation of time budget & cost estimate vi. Preparation of work program vii. Audit team selection B. i. ii. Continued Client

Job-in-charge Supervisor/Job-in-charge Supervisor/Job-in-charge Supervisor/Job-in-charge

Job-in-charge Job-in-charge Supervisor/Job-in-charge Job-in-charge Job-in-charge

Putting a new job number Updating of the following: a. GRA memo b. Client profile c. SRA memo d. Work program iii. Preparation of the time budget and cost estimate iv. Audit team selection 2. Field Work i. ii. iii. iv. v. vi. vii. viii. 3. Preparation of deputation letter Briefing to team members Issue of circularization to debtors, creditors, banks and donors Substantive audit Submission of Job Status Report (Saturday) Updating of Job Admn. Report (Saturday) Compilation of work paper file Obtaining management representation letter

Job-in-charge Supervisor/Job-in-charge

Job-in-charge Supervisor/Job-in-charge Job-in-charge Job-in-charge and other team members Job-in-charge Job-in-charge Job-in-charge Job-in-charge

Conclusion & Reporting i. ii. Preparation of audit report Review of report and work paper file

Job-in-charge Supervisor 18

iii. iv. v. vi. vii. viii.

Final review Referencing of report Submission of draft report Attending discussion meeting with client Submission of final report Preparation of time analysis sheet and cost analysis sheet

Engagement Partner/Supervisor Independent referencer Job-in-charge Partner/Supervisor/Job-in-charge Job-in-charge Job-in-charge

Note: Throughout the year all audit staff including supervisors will prepare time sheet and time report and submit to the office fortnightly.

2.14Role of the Personnel:

Personnel Partners Role The role of a partner is to get new clients and also sometimes the clients approach the partners themselves. The partners also make sure the existing clients are provided with the best possible service. Partners guide their employees to prepare a proposal which is to be submitted to the client depending on what kind of service the client requires. An audit manager is a Chartered Accountant who assists the partners in various ways. He/ she review reports before signing by the engagement partner. A supervisor may or may not be a Chartered Accountant. He has to complete the course and having some years experience in the field of accountancy therefore he designated as the Audit Supervisor of the firm. Audit manager briefs the audit supervisor on where and when an audit has to be performed and how the job is to be carried out. An audit senior has some years of experience in the accountancy field therefore he has been designated as the audit Senior of the firm. Audit senior is briefed by the audit manager and supervisor about where and when an audit has to be performed and how the job is to be carried out. A semi-senior student has to complete at least one year of article ship in the firm. Every time he is liable to his assigned senior/s. Junior Students are the fresher who have just joined as an articled to the firm.

Audit manager

Supervisor

Senior student

Semi-Senior Student

Junior Student

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Non Professional Staff : The numbers of non professional staffs involved with the firm are as follows: General Manager (GM) Manager, Administration Accountant IT Specialist Computer Operator Photocopy Machine Operator Receptionist.

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Chapter 3 LITERATURE REVIEW

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3.1 The Concept of Audit Automation:

Automation is the use of control systems and information technologies to reduce the need for human work and such that Audit Automation is the use of Control systems and information technologies in the audit procedures with a view to reducing the need for human work and time spent and thus achieving the efficiency and quality of Audit procedures.

3.2 Why should Auditors use Automation in Audit?

Now a days automation has become a matter of competitive advantage. Most of companies and firms today adopt automation as a competitive advantage in various business processes with a view to outracing their competitors. Automation in audit will not only increase the quality of the audit but also the help to achive efficiency. .

3.3 Drivers and Forces behind Audit Automation:

The audit process which is performed manually is not able to function well in todays increasingly complicated environment. Recognizing the fact the worlds most renowned accounting institutions like ICAEW, AICPA, ACCA required a preliminary review of computer usage and Information Systems. Such review evaluates the impact of computerization in the audit firms systems and prescribes the necessary extent of review. The cost factor complicated the problems faced by auditors. The intrinsic profit margin of Audit activities is probably decreasing due to the competitive environment in the profession. Ultimately, advanced information systems require auditors to integrate technology into the audit process. An example will make it clear that Automated Teller Machines (ATMs) dont require the creation of a source document to which auditors are accustomed. Therefore, auditors tend to require the generation of an equivalent to capture data for audit trail purpose. Besides, the increased competition among the firms and companies also drive the auditors to make the audit procedures automated.

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3.4Tools and Software for Audit Automation:

After many of the audit firms experimented with application-specific software the audit tools evolved as a solution to the complicated problems. The integration audit sampling plans into these generalized software has been done. Although these applications are not widely used in the accountancy firms, these are commonly used by most of the Fortune 500 companies for their internal audit purpose. The benefits of using audit software include they are independent of the system being audited and will use a read-only copy of the file to avoid any corruption of an organizations data, many audit-specific routines are used such as sampling, they provide documentation of each test performed in the software that can be used as documentation in the auditors work papers.However some of the audit Tools with automation software are discussed below:

3.4.1 Computer-assisted audit techniques(CAATS):

Computer-assisted audit techniques(CAATS) is considered to be the most popular tool for Auditing automatically. It is a growing field within the audit profession. CAATs is the practice of using computers to automate the audit process. CAATS normally includes utilizing basic office productivity software such as Spreadsheet and Word processors programs and more advanced software packages involving use of Statistical Analysis and Business Intelligence tools.

CAATs is referred as synonymous with incorporating data analytics into the audit process. This is one of basic fields within the audit profession. There is clearly a difference between CAATs and traditional audit procedures. As we know the traditional method of auditing directs auditors to build conclusions based upon a sample of a population, rather than an examination of all available data. The use of samples may diminish the validity of audit conclusions. Management realizes that they conduct thousands or perhaps millions of transactions a year and the auditor only sampled a handful. The auditor will then state that they conducted the sample based upon generally accepted audit standards (GAAS) and that their sample was statistically valid.Another common criticism of the audit profession occurs after a problem emerges. Whenever a problem emerges within a department, management might ask, "Where were the auditors?" This is stupid question, because nobody can see beyond the present. CAATs is used to these types of problems. CAATs, as it is commonly used, is the practice of analyzing large volumes of data looking for anomalies. A well designed CAATs audit will not be a sample, but rather a complete review of all transactions. Using CAATs the auditor will extract every transaction the business unit performed during the period reviewed. The auditor will then test that data to determine if there are any problems in the data. For example, using CAATs the auditor can find invalid Social Security Numbers (SSN) by comparing the SSN to the issuing criteria of the social security administration. The CAATs auditor could also easily look for duplicate vendors or transactions. When such a duplicate is identified, they can approach management with the knowledge that they tested 100% of the transactions and that they identified 100% of the exceptions.
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CAATs allows auditors to test for specific risks. For example, an insurance company may want to ensure that it doesn't pay any claims after a policy is terminated. Using traditional audit techniques this risk would be very difficult to test. The auditor would "randomly select" a "statistically valid" sample of claims (usually 3050.) They would then check to see if any of those claims were processed after a policy was terminated. Since the insurance company might process millions of claims the odds that any of those 3050 "randomly selected" claims occurred after the policy was terminated is extremely unlikely.Using CAATs the auditor can select every claim that had a date of service after the policy termination date. The auditor then can determine if any claims were inappropriately paid. If they were, the auditor can then figure out why the controls to prevent this failed. In a real life audit, the CAATs auditor noted that a number of claims had been paid after policies were terminated. Using CAATs the auditor was able to identify every claim that was paid and the exact dollar amount incorrectly paid by the insurance company. Furthermore, the auditor was able to identify the reason why these claims were paid. The reason why they were paid was because the participant paid their premium. The insurance company, having received a payment, paid the claims. Then after paying the claim the participant's check bounced. When the check bounced, the participant's policy was retrospectively terminated, but the claim was still paid costing the company hundreds of thousands of dollars per year. However, the CAATs driven review is limited only to the data saved on files in accordance with a systematic pattern. Much data is never documented this way. In addition saved data often contains deficiencies, is poorly classified, is not easy to get, and it might be hard to become convinced about its integrity. So, for the present CAATs is complement to an auditor's tools and techniques. In certain audits CAATs can't be used at all. But there are also audits which simply can't be made with due care and efficiently without CAATs. In the most general terms, CAATTs can refer to any computer program utilized to improve the audit process. Generally, however, it is used to refer to any data extraction and analysis software. This would include programs such as Spreadsheets (e.g Excel), databases (e.g. Access), Statistical Analysis (e.gSAS ), Business Intelligence (e.g Crystal Reports and Business Objects ) etc. There are, however, companies that have developed dedicated specialized data analytic software specifically for auditors.

Product Name /Brand Audit Command Language (ACL) Interactive data extraction and analysis (IDEA) ESKORT Computer Audit (SESAM) ActiveData For Excel CorpSystem ActiveData Monarch TopCAATs for Excel Picalo QzCAATT

Company ACL Services Ltd. Caseware International Intracom IT Services Denmark A/S InformationActiveInc CCH / Wolters Kluwer Datawatch Corporation Reinvent Data Ltd Partly Open Source QuadZero LLC
24

countTXT DB Secrets Find Duplicate Records (FDR)

Bollingen Software Ltd. Soft Magnet Technologies Bollingen Software, LLC

In addition to using data analysis software, the auditor uses CAATS throughout the audit for the following activities while performing data analysis:
Creation of electronic work papers Keeping electronic work papers on a centralized audit file or database will allow the auditor to navigate through current and archived working papers with ease. The database will make it easier for auditors to coordinate current audits and ensure they consider findings from prior or related projects. Additionally, the auditor will be able to electronically standardize audit forms and formats, which can improve both the quality and consistency of the audit working papers. Fraud detection

CAATTs provides auditors with tools that can identify unexpected or unexplained patterns in data that may indicate fraud. Whether the CAATS is simple or complex, data analysis provides many benefits in the prevention and detection of fraud. CAATs can assist the auditor in detecting fraud by performing and creating the following Tests which is shown in the following figure -

25

Analytical Tests

Data Analysis Reports

Fraud Detection by CAATs

Continuous Monitoring

Curb stoning surveys

Analytical tests

Evaluations of financial information made by studying plausible relationships among both financial and non-financial data to assess whether account balances appear reasonable (AU 329). Examples include ratio, trend, and Benfords Law tests.
Data analysis reports

Reports produced using specific audit commands such as filtering records and joining data files.
Continuous monitoring

Continuous Monitoring is an ongoing process for acquiring, analyzing, and reporting on business data to identify and respond to operational business risks. For auditors to ensure a comprehensive approach to acquire, analyze, and report on business data, they must make certain the organization continuously monitors user activity on all computer systems, business transactions and processes, and application controls.
26

 Curb stoning in surveys

Curb stoning is the term for instances where a surveyor completes a survey form by making up data. Because some of the data should conform with Benford's law, this practice can be detected using CAATTs which provide the capability of performing such tests.

3.4.2 :AutoAudit :
AutoAudit is a specialized software designed for the Automated Solution of Internal Audit Departments in any organization. Increased audit workloads stemming from expanding risk assessment responsibilities, increased regulatory scrutiny, and constrained budgets leave internal audit departments consistently trying to do more with fewer resources.Despite this, many audit departments still use manual and paper intensive processes, spending countless hours documenting workpapers and preparing reports. AutoAudit takes the paperwork out of workpapers and enables you to standardize, automate and manage key aspects of your audit process. AutoAudit is proven to improve the productivity, efficiency and consistency of internal audit departments. AutoAudit automates processes including risk assessment, scheduling, work papers and reporting. Easy to implement, maintain, and use, AutoAudit comes complete with a standard library of templates that makes it easy to implement a consistent audit methodology. Multi-level risk assessment allows for quick and easy tracking and reporting, and users are able to generate a broad array of reports with the touch of a button. AutoAudit is the only audit automation tool that stores workpapers in a highly secure and centralized database for a streamlined review process. AutoAudit is a comprehensive audit management software package that adapts to any audit structure (COSO, CoCo, CSA) and offers a number of features designed to ease the burdens of a busy audit department. The most remarkable functions of AutoAudit includes

Risk assessment Planning Scheduling Workpapers Reporting Issue tracking Time and expenses Quality assurance Personnel records

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3.4.3 :Tax audit automation

With the resounding success of the automated elections, many people and business entities have now recognized that automating certain processes facilitates timely completion of tasks and eases the load of employees. This is high time for the National Board of Revenue to consider conducting their tax assessment entirely through computerized audit. Actually, some of the operations of the NBR are already done electronically, such as the filing of receipts of tax returns and payments through the Electronic Filing and Payment System (eFPS). The NBR has also recognized that in todays business environment, the use of computers and accounting applications to process business transactions has become indispensable, even for SMEs. The emergence of various technologies in data processing has changed the way a tax audit or examination can be efficiently and effectively done, prompting the NBR to provide guidelines to the NBR revenue officers or examiners on the use of computer-assisted audit tools and techniques (CAATTS). I have no doubt that in the future, all tax assessments will be performed through computerized audit once the NBR revenue officers or examiners fully embrace the use of audit tools. In recent NBR issuances and pronouncements, it is apparent that the NBR is gearing towards computerized audit. Now the question arises - what would be the benefit to the NBR and to the taxpayers? On the part of the NBR in general, the use of computerized audit will shorten the audit cycle, which would result in the timely submission of the reports of investigation. The NBR examiners will also be able to increase the number of taxpayers who are examined in a given year. Moreover, the tax examination will be focused on critical aspects of the taxpayers financial operations i.e., the operations or processes with critical tax issues -- which would ensure that a quality audit has been conducted. On the part of the NBR examiners in particular, the use of computerized audit will enable them to concentrate on analyzing, interpreting and evaluating the reports generated from the computerized audit rather than doing the non-analytical procedures. As an audit practitioner myself, the use of audit tools has helped me profoundly in reducing the time spent conducting an audit without sacrificing the quality of the audit; in fact, it helps enhance the quality. I believe that the NBR examiners will truly welcome such opportunities. Conducting an audit using electronic records would also save on cost for taxpayers in producing the required documents, and they dont have to worry about the documents getting lost (which some taxpayers have experienced) since these will be submitted electronically.

28

Also, the tax findings of the NBR examiners will hopefully arise from valid tax issues. A lot of taxpayers have complained that the tax findings of the NBR examiners have no legal basis and would be eliminated had the NBR examiners done the necessary analysis and reconciliation. As a result, the taxpayers have to perform the necessary reconciliation and explanation and in the process incur unnecessary costs. Moreover, with the use of audit tools, the tax examination will be completed faster, enabling the taxpayers to focus on their business operations rather than the NBR examination. The NBRs use of computerized audit will be an eye-opener for taxpayers in terms of ensuring compliance with tax laws and regulations. The use of audit tools will broaden the scope of the NBR tax audit. With the effort of the NBR to strictly implement compliance with tax rules and regulations as a means of increasing revenue taxes, I believe that the NBR will fully adopt computerized audit as a tool in generating tax assessments. Thus, the taxpayers should now be serious and honest in evaluating whether their current tax practices are compliant with tax rules and regulations.With the use of computerized audit, I do hope tax audits will now be completed in weeks and not in months or even in years.

3.4.4: Audit Administration Information Management System

(AAIMS)
Audit Administration Information Management System (AAIMS) will help Auditors manage their day-to-day activities and provide a single data base of all information pertinent to department operations. AAIMS addresses the following business functions: audit universe (to inventory all potential audits), risk assessment (to prioritize the workload), planning (to establish what audits will be performed), scheduling of audits and auditors, time reporting, cost accounting (to charge the various business units for audit work), maintenance of personnel files, and quality/productivity measurements. AAIMS will use the client/server architecture where the data and business logic reside on a file server and the presentation (graphical user interface) resides on the PC. The system will be LAN-based, utilizing Novell Netware/386 to gain access to OS/2's Data Base Manager System from workstations using MS-DOS/Microsoft Windows 3.1. AAIMS will be a fully compatible Windows 3.1 application. The system was developed using Texas Instruments Information Engineering Facility (IEF), which uses a model developed with the user's active participation to create the data base. The user of the system thus establishes the needed elements and the relationships between the data elements. By using IEF and a phased release schedule, auditors will be able to implement the audit universe, risk assessment and planning functions of the system within nine months; the complete system will be implemented in 15 months. Considering the normal life cycle of a major system development project, this is a significant accomplishment.

29

3.4.5 Telecom Audit and Telecom Auditing

Automating the Telecom Audit

VocioTelecom and mobility career experts has created a specialized software to quickly and accurately audit telecom invoices. Their methodology is the result of utilizing the latest software and OCR technology combined with time tested telecom auditing "best practices". By combining the latest technology, along with industry "best practices", organizations will be able to quickly and accurately find billing errors, out of date inventory, incorrectly applied tariff's and numerous other mistakes on carrier invoices.
Telecom Audit Methodology

Using the latest technology and software is only part of the telecom audit process. The methodology combines the latest technology with an experienced team of telecom auditors who review and analyze all of the invoice, contract and CSR (customer service record) data. This results in a comprehensive telecom audit which includes:

A validated inventory of all telecom and wireless services, in addition a site survey may be required to physically validate circuits or trunks Recommendations for optimizing current network services by eliminating services or upgrading to newer technologies such as: MPLS, SIP Trunking, Ethernet over Copper Evaluation of existing contracts. We benchmark your contracted pricing to ensure all network costs are in line with current tariff's, promotions for like sized enterprises.

3.4.6 Digital Forensic Auditing

The range of services of Digital Forensic Auditing includes consulting facilities in digital forensic auditing. Forensic Auditing deals with the detection and prevention of fraud, including the abuse or misuse of any organizations assets. The tools of Digital Forensic Auditing are specialized in digital forensics that involves the use of legally recognized tools and techniques for the recovery and analysis of electronic data with the ultimate aim of either:

Presenting a reconstruction of the evidence found to be criminal and which can be used in legal matters. Helping to anticipate acts which can prove to be disruptive to your business.

30

Chapter 4 ANALYSIS AND FINDINGS OF THE STUDY

31

.The findings of the study have been discussed in the following heads in a descriptive manner

4.1 The Benefits of Audit Automation :

The study has found the following benefits of using Automation in Audit.However, a diagram will clarify the benefits of Audit automation to auditors which is as follows-

Issues Tracking

Keeping Auditors connected

Reduced Audit Cost

Reduced Fraud Risk

Why need Automation in Audit?

Improved
Operational Effect.

Managing the workflow

Improved Audit Quality

Activity History Monitoring

32

Now I am going to present how the above advantages can be achieved through Audit Automation. Reduced Audit Cost Audit Automation reduce audit testing time by up to 75% for critical systems and business processes. Automation software help eliminate the need to re-perform most point-in-time audit tests once continuous monitoring is in place. Audit Automation save valuable time for busy auditors, reduce travel requirements and improve retention and job quality. Improved Audit Quality Audit Automation tools move from sample-based testing to monitoring full populations of data and identifying all exceptions. It ensures consistency of testing processes and enable auditors to focus time and attention on the most important business areas. It enables real time disclosure in the reporting cycle. Improved Operational Effectiveness Audit Automation maintain an audit departments independence while still providing managers visibility into potential business risks or problems early so they can take appropriate action. It improves cash flow by identifying best practices and non-compliance with corporate policy (e.g. payment terms) resulting in optimized business processes. Reduced Fraud Risk Automation help internal auditors prevent occupational fraud including collusive fraud by creating a perception of monitoring. The Association of Certified Fraud Examiners (ACFE) estimates that fraud costs 5% of annual revenue, on average. Eliminating just 10% of this cash leak can result in significant savings. Keeping Auditors Connected Because much of audit work takes place in remote locations around the world, a major goal of automating the audit process is providing staff auditors and audit management alike with ondemand access to complete and current information. To achieve this, an audit automation tool named Auditor Assistant harnesses the power of the server component of Lotus Notes to create and maintain documentation databases. And it employs the Notes client to replicate the serverbased information to individual auditors' computers so that it can be viewed or processed even after the clients are disconnected from the network. Although Notes provides the capability to replicate information, the Auditor Assistant "desktop" makes this information easy to use. For example, Auditor Assistant can be customized so that users see only those icons that correspond to Notes databases that are relevant to their current projects. Moreover, Auditor Assistant ships with a host of forms and templates that are commonly used in the audit documentation world. Notes-only users would not only have to
33

create all of those documents from scratch, they would also have to program the workflow and other logic underlying them. Managing the Workflow: Audit Automation helps auditors to manage the overall workflow so smoothly that they easily identify the work break down structure whenever they need it. Automation helps to manage the workflow of an organization (whether it is an audit firm or any other type doesnt matter) so accurately and perfectly. Activity History Monitoring: In the past, it was tough to keep track of what audit work had been done within a given business unit, and this lack of information was frustrating to the audit staff and its clients alike. Now, the online documentation allows anyone to see not only the communications that have taken place with any given audit customer, but also the scope and results of all past audit work. This has resulted in better auditor-client relationships. Issues Tracking: Timely follow-up of issues also poses a problem when the audit process is not automated. Although the audit maintains issue-tracking spreadsheets, it nonetheless is difficult to determine what issues required follow-up and when. In fact, it is difficult just to ensure that all the needed issue-related information had been entered into the spreadsheets. And organization-wide issue trends were even more difficult to identify. With Auditor Assistant, however, issue tracking is automatic and follow-up is mandatory. That is, if an issue achieves a materiality threshold, the software automatically creates a "follow-up project proposal" in the system that must be approved, entered into the workflow process, and addressed before a project can be closed. In effect, this feature is a forced control

4.2 Limitations of Audit Automation:

Automation creates certain problems which must be borne in mind by the management. We can refer these problems as the limitations for the Audit Automation. I tried to analyze these limitations from both micro and macro levels.

34

These problems are:

Strict monitoring and

Heavy Capital Investment

maintenance needed

Problems/ Limitations of
Dehumanization

Problem for developing countries

Audit Automation

Benefits of Experts Suggestions lost

Displacement of Labor

Heavy Capital Investment : One of the most critical problem for any organization to implement Audit Automation is the cost of the Investment. Audit automation will require a lot of investment of money, labor and time but in the long run it will benefit the organization in many ways by using economies of scale. So Heavy Capital Investment is an important factor in the implementation of an appropriate audit automation systems. Displacement of Labor: In spite of assurances to the contrary, Audit automation does not result in worker replacement, and often in management replacement as well. Workers in unions will oppose the move for automation. There are still some audit procedures that cant be replaced by machines and for that displacement of labor is not possible in all the cases.

35

Benefit of Experts Suggestions Lost: Sometimes the suggestions got from the senior experts will be overlooked by the automated procedures and it will affect the audit procedures severely. The audit firms will lose the valuable advice from the experts and at the same time organizations will lose the top level suggestions that would help the audit procedures. When the Labor being displaced, the benefit of suggestions from employees is lost .This is an irreparable loss to the management. Tighter Monitoring may be needed: Strict monitoring and maintenance must be ensured in order to receive the ultimate benefit of the Audit Automation. This will cost a huge amount of money and time as monitoring and maintenance cost. Dehumanization Automation, carried to its logical end, dehumanizes the organization and generates a peculiar atmosphere in it. True, it offers several advantages .It is also true that an automated systems frees the management from labor troubles .At the same time, it should not be forgotten that the employment of thousands of persons in a single organization carries its own charm and gives a sense of pride and satisfaction in achievement which hundreds of computers and robots cannot. Problem of Developing Countries Audit Automation poses certain peculiar problems for developing countries like Bangladesh.These countries are characterized by a high rate of unemployment, scarcity of foreign exchange, shortage of highly skilled personnel, shortage of capital, etc. All these are impediments in the introduction of new technology. Not that automation has any relevance in developing countries .In fact; it has a definite role to play in these countries as well. The developing countries cannot, for some more time to come, afford the luxury of automation as it is understood and introduced in highly developed countries Selective automation to ensure accuracy, if not speed may be more relevant in the developing companies, where automation without tears is a cry which should be needed and respected for sometime to come.

4.3 SWOT Analysis:

Based on the above findings including the benefits and limitations of developing, maintaining and implementing the audit automation systems I can prepare a SWOT Analysis. The central purpose of this analysis is to identify the strategies that will help a firm exploit the external opportunities, counter threats, build on and protect company strenghsand eradicate weakness.The SWOT Analysis for development and implementation of Audit Automation for any kind of organization like ACNABIN will have the following External threats and opportunities as well as the following strengths and weakness.

36

Strengths:
ACNABIN has well skilled, professional and experienced Auditors. ACNABIN has good reputation in the market. ACNABIN has articled students from various reputed universities of Bangladesh including Dhaka University, NSU, AIUB,CU etc. ACNABIN has enough capital to develop and implement the Audit Automation systems. ACNABIN has a large number of clients in the market. Weaknesses: Though ACNABIN has well reputed professionals and skilled students it has some unskilled students and managers which is a strong impediment against the development of Audit Automation Procedures. ACNABIN is concerned of dehumanization. It concerns for the job of some clerks that would be a problem for the firm to implement the Audit Automation.

Opportunities: The Audit Automation can be a competitive advantage since any firm in Bangladesh is yet to develop and maintain the Audit Automation. It can take advantage of the Economies of Scale and thus reduce the cost of developing and maintaining audit automation. ACNABIN can increase the number of clients by providing services at a lower cost and yet with quality . ACNABIN can attract a large number of talents from different backgrounds including engineering, business, Information systems by the introduction of Audit Automation.

Threats: The other firms may introduce Audit Automation when they will observe the benefits of Automation and ultimately will be a competitor. The number clients who dont really prefer automated audit may reduce.

37

Chapter 5 CONCLUSION & RECOMMENDATIONS

38

Audit Automation is a new concept in the arena of Accountancy and it is believed that it will help the auditors perform their activities so efficiently and perfectly while maintaining the quality of Audit. Audit Automation has huge potentiality to be widespread because in the near future everything will be automated from the production of needle to the manufacturing of vessels. The Auditors of today have to be aware of the latest technologies used in the production and manufacturing of goods and services as well as the latest information systems used in the supply chain because only they are only certified persons who are able certify the documents of those firms and organizations. The auditors must be updated with the various new technologies and new ways of doing things. The audit automation is totally a new concept in Bangladesh and no previous research was done on this topic. Thats why I attempted to make the auditors and related professionalsunderstand of the new concepts of Audit and various tools and software used in Audit. I tried to explain how these software and tools can help an auditor in various ways and how they can take advantage of the new technologies used in audit that will distinguish in the market from other firms and organizations. Todays business processes are so dynamic and complicated and requires to be updated and well-informed of the latest events occurred in the todays business world. In this study I tried to describe the benefits of developing and maintaining an audit automation systems and the limitations that an organization will face while they are going to design a automated systems for audit. The sample SWOT Analysis for a chartered Accountancy firm like ACNABIN has been done so that it can make the auditors understand the importance of Audit Automation. I very well believe that all the accountancy firm will be able to develop and maintain an effective and efficient Automation systems for their Audit procedures and they will surely be driven to do this. Hence, I urge all the accountancy firms and related institutions as well as other organizations (for internal audit purpose )come forward to take advantage of this new technology. Finally, we should keep in mind that we have to take the decision to develop and maintain an automated system after a complete analysis of the organizations capacity because if the organization is not capable enough to maintain such systems then the automation will be a burden for any organization. The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency. -Bill Gates

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REFERENCES

40

Alvin A. Arens & James K. Loebbecke (2000), Auditing: An Integrated Approach,8th edition, Prentice Hall, New Jersey. K.C Laudon & J.P Laudon(2006), Management Information Systems : Managing the digital firm, 11th edition, Pearson education, USA. Awad E. (1988) Management Information Systems : Concepts , Structures and Applications, Benjamin Cummings Thomson Reuters Accelus (2009), AutoAudit: An automated solution for internal audit departments Karl E. Wiegers (2010), Automating Requirements Management Bach, J. Test Automation Snake Oil, 1999. Published in Windows Tech Journal, 10/96, and proceedings of the 14th International Conference and Exposition on Testing Hoffman, D. (1999) Test Automation Architectures: Planning for Test Automation, Quality Week 1999

Kaner, C. (1997) Improving the Maintainability of Automated Test Suites, Quality Week 1997 Kaner, C. (1998) Avoiding Shelfware: A Managers View of Automated GUI Testing .Alles, M.A., and Datar, S. (2004). Cooking the Books: A managementcontrolperspective on financial accounting standard setting and the section 404requirements of the Sarbanes-Oxley Act. International Journal of Disclosure andGovernance, Vol. 1, No. 2

David L. Cannon, (2011).CISA Certified Information Systems Auditor Study Guide, 3rd edition,Sybex, New york Vasarhelyi, M.A. (1984). Automation and changes in the audit process. Auditing: A Journal of Practice & Theory 4(1) (Fall). David Coderre(2008), Internal Audit : Efficiency Through Automation, 1st edition Wiley; New York
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David Coderre (2009). Fraud Analysis Techniques using ACL,1st edition (August 3, 2009), , Wiley, New York Charles W.L Hill and Gareth R. Jones (2006), Theory of Strategic Management with Cases, 8th edition, South-Western Cengage Learning, Canada. Wendy Robson(1997), Strategic Management & Information Systems,2 nd Edition, Prentice Hall, England www.approva.net www.amazon.com www.hayesmanagement.com accelus.thomsonreuters.com www.punongbayan-araullo.com processimpact.com www.acnabin-bd.com
www. wikipedia.com

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APPENDIX

43

Appendix A

Acronyms
Acronyms
CAATs ICAEW ICAB ICMAB AICPA ACL CRM PRM SCM MIS ERP ACCA ATM IDEA FDR CSA COSO IIA ISO EFPS NBR ISA BSA BAPS IAS PAL PAM PARD PASS

Full Name
Computer-Assisted Audit Techniques Institute of Chartered Accountants in England & Wales Institute of Chartered Accountants of Bangladesh Institute of Cost and Management Accountants of Bangladesh American Institute Certified Public Accountants Audit Command Language Customer Relationship Management Partnership Relationship Management Supply Chain Management Management Information Systems Enterprize Resource Planning Association of Certified Chartered Accountants Automated Teller Machines Interactive data extraction and analysis Find Duplicate Records Canadian Standards Association Committee of Sponsoring Organizations Institute of Internal Auditors International Standards Organization Electronic Filling and Payments System National Board of Revenue International Society of Automation Bangladesh Standards of Auditing Bangladesh Auditing Practice Statements International Accounting Standards Patient Accounting Language Priority Audit Memorandum Provider Audit & Reimbursement Department Procurement Automatic Source System

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Appendix B The Time Sheet of the Internship Date

09/01/2012

Particulars
Orientation program Introduction of various norms and code of conduct of Chartered Accountacy. Introduction of Dress code for this profession A simple Interview program held by one of the Partners of the firm Agrani Bank Ltd. Agrabad br. Verification of Alternative Cash Assistance Files Client:Knittex Textiles Ltd. L/C No: I222095467830 Bank Id: 45/11 One Bank Ltd. Agrabad br. Verification of Alternative Cash Assistance Files Client: Base Textiles Ltd. L/C No: NLNL1NL45678894 Bank Id: 51/10-11 One Bank Ltd. Agrabad br. Verification of Alternative Cash Assistance Files Client: Base Textiles Ltd. L/C No: 56837452109 Bank Id: 34/11 One Bank Ltd. Agrabad br. Verification of Alternative Cash Assistance Files Client: Base Textiles Ltd. L/C No: 74834590w3490 Bank Id: 38/11 One Bank Ltd. Principal br. Verification of Alternative Cash Assistance Files Client:Knitivo Textiles Ltd L/C No: 8904587N236 Bank Id: 35/10-11 One Bank Ltd. Agrabad br. Verification of Alternative Cash Assistance Files Client: Base Textiles Ltd. L/C No: 34789123NJH78

Hours Worked
08

10/01/2012

08

11/01/2012

08

12/01/2012

08

15/01/2012

08

16/01/2012

08

17/01/2012

08

45

18/01/2012

19/01/2012

22/01/2012

23/01/2012

24/01/2012

25/01/2012

26/01/2012

29/01/2012

30/01/2012

Bank Id: 56/11 One Bank Ltd. Agrabad br. Annual Audit 2011 Cash and Cash Equivalence Verification of the limits of Cash in vault, cash In counter, Cash in transit One Bank Ltd. Agrabad br. Annual Audit 2011 Fixed Asset Verification Observation on the various fixed assets of the Organization One Bank Ltd. Agrabad br. Annual Audit 2011 Observation on Deposit opening Procedures Verification of the account opening procedures and requirements One Bank Ltd. Agrabad br. Annual Audit 2011 Verification of Credit and Securities against credit& Exit Meeting Identification of Classified Loans and Unclassified Loans One Bank Ltd. Khatungonj br. Annual Audit 2011 Investment Identifying the portion of Investments in different sectors One Bank Ltd. Khatungonj br. Annual Audit 2011 Interest Suspense Accounts Identifying the Interest Suspense accounts One Bank Ltd. Khatungonj br. Annual Audit 2011 Verification of top 20 accounts and their balances Identifying the top 20 accounts of the bank and confirming their balances One Bank Ltd. Jessore br. Verification of Alternative Cash Assistance Files Client: Ahad Jute Spinners Ltd. L/C No: P 085/2011 Bank Id: 91/10-11 One Bank Ltd. Jessore br. Verification of Alternative Cash Assistance Files Client: Ahad Jute Spinners Ltd. L/C No: P 089/2011 Bank Id: 85/11

08

08

08

08

08

08

08

08

08

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31/01/2012

01/02/2012

02/02/2012

06/02/2012

07/02/2012

08/02/2012

09/02/2012

12/02/2012

13/02/2012

One Bank Ltd. Gulshan br. Verification of Alternative Cash Assistance Files Client: K.C Print Ltd. L/C No: U4589DS90210 Bank Id: 67/11 One Bank Ltd. Jessore br. Verification of Alternative Cash Assistance Files Client: Ahad Jute Spinners Ltd. L/C No: OSTL/ JY /456/11 Bank Id: 82/11 One Bank Ltd. Gulshan br. Verification of Alternative Cash Assistance Files Client: Florence Fabrics Ltd L/C No: T09E346782343 Bank Id: 73/11 One Bank Ltd. Jessore br. Verification of Alternative Cash Assistance Files Client: Ahad Jute Spinners Ltd. L/C No: ALTEX/4578/2011 Bank Id: 84/11 One Bank Ltd. Jessore br. Verification of Alternative Cash Assistance Files Client: Ahad Jute Spinners Ltd. L/C No: P-89/ 2011 Bank Id: 56/10-11 One Bank Ltd. Jessore br. Verification of Alternative Cash Assistance Files Client: Ahad Jute Spinners Ltd. L/C No: OSTL/JY/3780/2011 Bank Id: 37/11 One Bank Ltd. Principal br. Verification of Alternative Cash Assistance Files Client: Knitivo Ltd. L/C No: 239854129082 Bank Id: 65/11 One Bank Ltd. Gulshan br. Verification of Alternative Cash Assistance Files Client: K.C Print Ltd. L/C No: I5678M903N230 Bank Id: 59/11 One Bank Ltd. Gulshan br. Verification of Alternative Cash Assistance Files

08

08

08

08

08

08

08

08

08

47

14/02/2012

15/02/2012

16/02/2012

19/02/2012

20/02/2012

22/02/2012

Client: Florence Fabrics Ltd. L/C No: RS56902T341832 Bank Id: 43/11 One Bank Ltd. Principal br. Verification of Alternative Cash Assistance Files Client: Knitivo Ltd. L/C No: HJ569834K56 Bank Id: 68/11 One Bank Ltd. Jessore br. Verification of Alternative Cash Assistance Files Client: Ahad Jute Spinners Ltd. L/C No: P 91/ 2011 Bank Id: 78/11 One Bank Ltd. Jessore br. Verification of Alternative Cash Assistance Files Client: Ahad Jute Spinners Ltd. L/C No: OSTL/4581/2011 Bank Id: 73/11 One Bank Ltd. Jessore br. Verification of Alternative Cash Assistance Files Client: Ahad Jute Spinners Ltd. L/C No: OSTL/ 4530/ 2011 Bank Id: 80/11 One Bank Ltd. Jessore br. Verification of Alternative Cash Assistance Files Client: Ahad Jute Spinners Ltd. L/C No: ALTEX/5672/2010 Bank Id: 340/10-11 One Bank Ltd. Jessore br. Verification of Alternative Cash Assistance Files Client: Ahad Jute Spinners Ltd. L/C No: P-054/2011 Bank Id: 72/11

08

08

08

08

08

08

48