Application Activity-Seminar 5

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Application Activity-Seminar 5

8-63 List the advantages of using GAS.

Generalized audit software (GAS) are software programs designed specifically for auditors. Gas can be used to facilitate and automate the testing of 100% of a population when appropriate and help focus the auditors’ attention on specific risk areas or transactions. Gas is software designed to read, process, and write data. Auditors can use GAS to import a clients’ data; then the software can be applied to the data in a variety of ways. For example, the date can be scanned, sorted, summarized, stratified, analyzed, and used to obtain samples. Other functions include identification of duplicate items such as duplicate invoices, gaps in data such as a gap in a check sequence, an outliers in a population such as all invoices that exceed two times the average for a particular customer. (Chapter 8, p. 342-343).

GAS can be used to assist in testing internal control assertions and virtually every assertion related to financial statement account balances-as well as supportive testing assertions through other means, such as selecting samples to send confirmation on accounts receivable balances. (Chapter 8, p. 375).

Johnstone, K., Gramling, A., & Rittenberg, L. E. (2015). Auditing: A Risk Based-Approach to Conducting a Quality Audit. Boston, MA: Cengage

GAP advantages: Analyze a file • Select transactions based on logical identifiers • Select samples • Evaluate samples • Print confirmations • Analyze overall file validity • Generate control totals • Perform numerical analyses • Perform other tasks.

Retrieved September 22, 2015 from

Generalized Audit Software (GAS) is one of the families of Software that is frequently utilized in Computer-Assisted Auditing. It is an off-the-shelf package that can provide a means to gain access to and interrogate data maintained on computer storage media. It is one of the tools IT Auditors utilize to obtain evidence directly on the quality of the records produced and maintained by application systems.

GAS consists of a series of computer program routines that can read computer files, select desired information, perform repetitive calculations, and print reports in an Auditor-specified format. Generalized Audit Software enables Auditors to have direct access to computerized records and to deal effectively with large quantities of data. Since GAS can quickly scan, test, and summarize all the data in a computer file, many procedures that ordinarily would be performed on a sample basis can be extended to the entire population. In addition, the use of GAS typically leads to a better understanding of automated systems and computer-based operations. It can make auditing more interesting and challenging and is an excellent way of introducing Auditors to evidence collection process and electronic data file integrity checking within an IT Environment.

Generalized Audit Software can accomplish the following audit tasks:

1. Examine records for quality, completeness, consistency, and correctness (review bank demand deposit files for unusually large deposits and withdrawals)

2. Verify calculations and make computations (re-compute interest, Bank COT, etc. and verify payroll Net pay, Deductions, etc.)

3. Compare data on separate files (compare current and prior-period inventory files for obsolete and slow-moving items)

4. Select and print audit samples (accounts receivable confirmations, customer refunds over a certain amount).

5. Summarize and re-sequence data (re-sequence inventory items by location to facilitate physical observations).

6. Compare data obtained through other audit procedures with company records (compare creditor statements with accounts payable files).

Some advanced GAS can include a wide variety of audit functions. They enable even novice-Auditors to perform professional jobs. Apart from the wide range of audit functions and the ease of use, the advanced GAS are now able to access, analyze and report on a range of different files saved in heterogeneous hardware and software platforms which are distributed through either an enterprise Intranet facilities or other means, including the global computer networks.

GAS provides the distinct advantage over conventional programming languages of being relatively easy to learn and use. Most GAS systems require only about one week of training, and proficiency may be attained after several weeks of use. Furthermore, GAS specification coding, typically requires a fraction of the coding entries needed for conventional programming languages. This permits faster coding and reduces the likelihood of errors.

Retrieved September 22, 2015 from

Generalized Audit Software (GAS)

The auditor may use various types of software on PCs (or other computers) and may include customized programs, utility software, and generalized audit software for performing tests of controls and substantive tests.  Customized programs are written specifically for a clientCommercially produced utility software is used for sorting, merging, and other file maintenance tasks. 

Generalized audit soft-ware also performs such file maintenance tasks but generally requires a more limited understanding of the client’s hardware and software features.  The following is a list of functions performed by GAS (it is based on the AICPA Auditing Procedure Study Auditing with Computers):

Record extraction — Extract (copy) records that meet certain criteria, such as: (1)  Accounts receivable balances over the credit limit; (2)  Inventory items with negative quantities or unreasonably large quantities; (3)  Uncosted inventory items; (4)  Transactions with related parties

Sorting (e.g., ascending or descending order)

Summarization, such as: (1) By customer account number; (2) Inventory turnover statistics; (3) Duplicate sales invoices.

Field statistics, such as; (1) Net value; (2)  Total of all debt (credit values); (3)  Number of records; (4) Average value; (5) Maximum (minimum) value; (6) Standard deviation.

File comparison, such as; (1) Compare payroll details with personnel records; (2)  Compare current and prior period inventory files.

Gap detection/duplicate detection — Find missing or duplicate records.



Exportation — Select an application that has been performed using GAS and export to another file format (for additional analysis)

Retrieved September 27, 2015 from

Most generalized audit software are capable of performing the following functions.

Verify calculations: The auditor may use GAS to determine the mathematical accuracy of the calculations performed by the computer system of the enterprise. For example, the auditor may recalculate depreciation on fixed assets, interest on debentures, wages payable, etc.

Examine records for correctness, consistency and completeness. For example, identify debts which exceed a certain amount for which are outstanding beyond the credit period.

Compare data obtained through other audit procedures with enterprise records. For example, the auditor may compare the balances confirmed by the debtors with the balances appearing in the financials.

Compare/relate data on separate files. The auditor can compare date on different files of the enterprise to determine whither the two sets of data match. For example, the auditor can perform analytical procedures by co-relating data appearing in different computer files.

GAS focuses on the fully exploiting the data available in the entity’s application systems in the pursuit of audit objectives. GAS support auditors by allowing them to examine the entity’s data easily, flexibly, independently and interactively to data-based auditing. Using GAS, an auditor can formulate a range of alternative hypotheses for a particular potential misstatement in the subject matter and then test those hypotheses immediately. “What if” scenarios can be developed with the results and the auditors can examine the generated report rapidly.

Gupta, K., (2004). Contemporary Auditing. Tata McGraw-Hill Education. Retrieved September 28, 2015 from,+the+auditor+may+recalculate+depreciation+on+fixed+assets,+interest+on+debentures,+wages+payable,+etc.&source=gbs_navlinks_s

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