CAAT (computer-assisted audit technique)

CAAT stands for computer-assisted audit technique. It is an automated audit technique, such as audit software, test-data generators, computerized audit programs or specialized audit utilities, used to gather or help gather audit evidence and to test the effectiveness of controls.

In practice, a CAAT lets an auditor work directly with electronic records instead of reviewing paper or small samples by hand. The term appears in NATO terminology and in Canadian federal audit guidance, where it describes the tools auditors use on large data sets and information systems.

What CAATs include and what they test

The U.S. Government Accountability Office describes CAATs as automated tools that auditors can use to gather audit evidence. Its guidance also treats them as a way to test the effectiveness of information-system controls. Both points are set out in the GAO's audit guidance and its information system controls audit manual.

• Audit software that reads, analyzes and reports on electronic files.
• Test-data generators that run sample transactions through a system to see how it responds.
• Computerized audit programs built for a specific audit task.
• Specialized audit utilities that extract or compare data.

How the Canada Revenue Agency uses CAATs

Canadian federal audit practice is documented in the Canada Revenue Agency's Income Tax Audit Manual. The CRA guidance on CAATs says they are generally appropriate when transaction volume makes effective and efficient manual testing impractical, or when the audit trail is not visible.

The same guidance lists the procedures auditors commonly perform with CAATs:

• Analysis
• Extraction
• Summarization
• Stratification
• Sampling
• Consolidation or joining of files
• Matching
• Duplicate detection
• Gap detection

Matching, duplicate detection and gap detection are the tests most likely to surface problems in transaction records, such as repeated entries or missing sequence numbers.

A Department of National Defence example

A Department of National Defence audit report records the use of computer-assisted audit techniques to analyze data from the FMAS and MASIS systems and assess how consistent that data was. The example shows CAATs applied to departmental records inside a Canadian federal organization. The auditor ran the tests on the department's own data.

CAAT in NATO terminology

NATO's glossary of acronyms and abbreviations lists CAAT as "computer-assisted audit technique". It gives the French equivalent as "technique de vérification informatisée". Bilingual Canadian bid teams can use that French form when writing about the term.

What CAAT means for suppliers bidding on Canadian public contracts

CAATs are an audit method used by the auditor. The Canadian examples above, the CRA's audit manual and the National Defence audit report, describe audits of government and taxpayer records. They do not describe a clause, a solicitation type or a supplier obligation.

If you see the term in a solicitation or audit notice, read it as a reference to how an auditor will examine electronic records. Suppliers can prepare by keeping transaction data complete, consistent and easy to extract. Those are the conditions under which matching, duplicate and gap tests return clean results. Confirm any specific record-keeping or audit-access requirement in the solicitation or contract itself.