With reference to CAATs, explain briefly;

(i) The test data technique,

• This involves the auditor inputting dummy data into a client’s system to see that it processes it as required and produces the correct data.

(ii) Three types of audit software.

List five ways in which CAATs may assist the auditor during an audit engagement.

Identify, and explain briefly, two pitfalls or difficulties of which auditors should be aware when planning to me CAATs during an audit engagement.