Better Use Computer Assisted Auditing Techniques for Auditing Essay

Better Use Computer Assisted Auditing Techniques for Auditing - Essay Example The aim of this project is to give a better understanding of CAATs; this is further supported by practical illustrations and examples of CAATs. To start any audit, understanding and knowledge of the business should be gained during the planning stage. This knowledge of the business helps in analyzing the internal control systems, and then it is decided whether or not to rely on the internal control system. It is later decided upon the nature of the client and its system to use CAATs. The advantages of CAATs clearly outweigh its disadvantages and this technique clearly has an upper hand when it comes to processing large amounts of data. The other issue in this paper is the concern of using this technique after having proper analysis of the business being audited. Finally, the paper is concluded by pointing out that its benefits clearly outweigh its risk, how to plan for using the CAATs and recommended training of an IT audit specialist. Auditing is the process by which something is examined with a view to form an opinion. This allows users of that opinion to gain assurance that the opinion, process, or the information gathered can be trusted. The purpose of assurance services is to increase the confidence and reduce the risk of the user of those services. The main objective of auditing is to ensure that financial statements are free from material misstatement and are presented fairly by the management. An auditor carries out two types of assurance engagements, with one being the reasonable assurance engagement and the other being the limited assurance engagement. When giving out a reasonable assurance engagement, the auditor gathers sufficient and appropriate evidence to support the conclusion, as well as making it stronger. On the other hand, a limited assurance engagement gives out a negative assurance report and the evidence gathered in an assurance engagement is only related to the specific subject matter that is being audited

Business Economics Essay Example | Topics and Well Written Essays - 4000 words

Business Economics - Essay Example Wessels however points out that this does not necessarily mean that the citizens of the US have better living standard than their counterparts in the UK. (21). GDP therefore cannot be used as the sole factor in measuring the living standards of the citizens of a country. However chances are that a country with a high GDP has a better standard of living than that with a low GDP. So what encompasses GDP' Well there are a number of components which when added together make up the GDP of a country. According to Sowell, they include Consumption which is denoted by letter C, Investment which is denoted by letter I, spending by government and finally exports and imports denoted by letter X and M respectively. Consumption refers to all the money spent by citizens of a country in buying goods and services which they expect will satisfy their needs. This includes money spent on food, purchase of new clothes as well as entertainment. (50-51) Sowell further notes that spending by the government is another component of the GDP. For example the UK government spends money to buy new military equipment and also pay its workers. (70).This expenditure is also part of the country's GDP. Investments into an economy are also used in calculation of the Gross Domestic Product. ... To get the accurate value of GDP economist add the value of all goods produced in a country and then subtract the value of all goods which are imported. The total components of GDP is expressed mathematically as Y=C+I+G+(X-M). (Sowell 80-81) Wessels notes that measuring GDP is critical if economists are to determine the rate of growth of an economy. "In measuring GDP economists use two major methods, the expenditure method and the income approach". (qtd.in Wessels 71). The expenditure approach involves adding the total amount of money spent on final goods. In this case, GDP equals C+I+G+ (NX) where NX represents gross exports. The income approach involves adding all the income received by citizens of a country either through compensation, income from rental property, and profits of corporate organizations. Mathematically this can be expressed as GDP= Employee Compensation+Rental Income+Corporate Profits+Net Interest+Proprietor profits. UK GDP Figure for the year 2009 The GDP of the UK is estimated to be worth '315.5billion. What does this mean' The figure indicated above means that the total value of all goods produced in the UK in the 2008 to 2009 financial year amounts to '315.5 billion. This makes it the sixth largest economy in the world and third largest in Europe. How well did the GDP grow in 2009' In measuring the GDP of an economy, economists divide a given year into quarters. The growth of the economy in each quarter is measured and then a comparison is made with the previous quarter so as to note the difference which constitutes actual growth.(Wessels 55). For instance in the UK economy, GDP fell by 0.4% in the third quarter of 2009. In the second quarter of the same year GDP declined by a value of 0.6%. In