Auditing and Financial Management: From Auditape to Computer Assisted Audit Techniques

Citation
General Accounting Office, Auditing and Financial Management: From Auditape to Computer Assisted Audit Techniques, 11 GAO Rev., Issue 1 (Jan. 1, 1976) (not available online).

Overview
This article discusses the history of GAO audits of the financial statements pertaining to the insurance operations of the Federal Housing Administration (FHA). The magnitude of FHA operations and the GAO audit of the financial statements is enormous.

Before the GAO had the ability to use the computer to audit, it relied on manual techniques. However, the volume of transactions and related documentation limited the extent of GAO audit work. In 1969, the GAO first used the computer as an audit tool by applying Auditape to duplicate tapes of the FHA acquired home property system. Because Auditape was not compatible with the agency's computer, the GAO started to develop its own computer-assisted audit techniques (CAAT). The program incorporated accounting routines which were abstracted from the agency's program after a thorough analysis of these routines.

As GAO computer knowledge increased, a number of file-oriented CAAT programs were written which retrieve specific data from designated tape records and analyze, verify, sample, and summarize the data in the format which the GAO requires. With CAAT, the GAO has expanded the scope of its audit and attained a number of objectives not possible with manual techniques.