The auditor then can determine if any claims were inappropriately paid. Using CAATTs the auditor can select every claim that had a date of service after the policy termination date. Since the insurance company might process millions of claims the odds that any of those 30–50 "randomly selected" claims occurred after the policy was terminated is extremely unlikely. The auditor would "randomly select" a "statistically valid" sample of claims (usually e if any of those claims were processed after a policy was terminated. Using traditional audit techniques this risk would be very difficult to test. For example, an insurance company may want to ensure that it doesn't pay any claims after a policy is terminated. Traditional audit vs CAATTs on specific risksĪnother advantage of CAATTs is that it allows auditors to test for specific risks. The auditor will then test that data to determine if there are any problems in the data. Using CAATTs the auditor will extract every transaction the business unit performed during the period reviewed. A well designed CAATTs audit will not be a sample, but rather a complete review of all transactions. CAATTs, as it is commonly used, is the practice of analyzing large volumes of data looking for anomalies.
The traditional method of auditing allows auditors to build conclusions based upon a limited sample of a population, rather than an examination of all available or a large sample of data.ĬAATTs, not CAATs, addresses these problems. Traditional auditing vs CAATs Traditional audit example
CASEWARE IDEA CROSS TABULATE PROFESSIONAL
3 CAATs Education and Professional Development.1.3 Traditional audit vs CAATTs on specific risks.
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