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Article Excerpt
ABSTRACT: External, internal, and government auditors increasingly use audit software to improve the efficiency and effectiveness of audits. Incorporating technology such as generalized audit software into the classroom not only exposes students to "tools of the trade," but, more importantly, also facilitates student learning of audit concepts and procedures. The purpose of this paper is to provide information on two audit software packages, ACL and IDEA, so that instructors can evaluate the appropriateness of including one or both of these packages in their courses. We compare the packages from both a functional and pedagogical perspective, describing several uses in the classroom. We also provide student and instructor feedback from package use. An accompanying web page provides numerous resources for instructors considering adopting ACL or IDEA, including exercises, exam questions, slides, review questions, and syllabi.
Keywords: generalized audit software; computer-assisted auditing techniques; audit command language (ACL); Interactive Data Extraction and Analysis (IDEA).
I. INTRODUCTION
External, internal, and government auditors are increasingly utilizing audit software to improve the efficiency and effectiveness of audits. As enterprise-wide systems eliminate the traditional paper-based audit trails and environments become heavily automated, auditors are increasingly using audit software (Gelinas et al. 2001; McCollum and Salierno 2003). By incorporating technology, including computer audit software, into the curriculum, instructors help prepare students to apply new technologies in innovative ways. Technology heightens the learning experience by providing an opportunity for active student participation in understanding and interpreting the environment (Thompson et al. 1992).
Using an educator's perspective, this paper compares two computer audit software packages available on the market--Audit Command Language (ACL) and Interactive Data Extraction and Analysis (IDEA). In Section II, we discuss several reasons why an educator might adopt audit software in an accounting course. Section III presents an overview and a comparison of the two packages' basic training materials and features. In Section IV, we describe how the authors and instructors at other universities incorporate the packages into their curriculum. This section also provides student feedback, pedagogical suggestions, and a link to an accompanying web page offering student-ready materials, answer keys, and other resources. The paper concludes with an overall evaluation of ACL and IDEA.
II. WHY USE AUDIT SOFTWARE?
Given that the accounting curriculum seems to expand endlessly, why would an instructor consider adding an audit software package to his or her course? Teaching students the "tools of the trade" makes them more aware of current practice and therefore more marketable. Accounting students typically get exposure to other technological tools of the trade such as spreadsheets, accounting packages, database software, and online research resources (Bain et al. 2002). Incorporating audit software into the curriculum helps complete this toolkit and prepares students for the content of the computer-based Uniform CPA exam. Moreover, using audit software can help students develop high-order cognitive skills because it encourages them to actively participate in applying theory to real-life situations. Audit software activities become more relevant, allowing students to gain a better understanding of the software and studied environment (Hakeem 2001; Thompson et al. 1992). The following section expands on these points.
Use of Audit Software in the Accounting Profession
Professional organizations have developed professional standards and guidance to help auditors evaluate electronic evidence and advance toward continuous auditing. In 1998, the Information Systems Audit and Control Association (ISACA) established an audit guideline specifically addressing the use of Computer Assisted Audit Techniques or CAATs (ISACA 1998). In 1999, the AICPA and the Canadian Institute of Chartered Accountants (CICA) published a joint research report identifying six preconditions necessary for continuous auditing, including auditor proficiency in information technology (IT) and the system (CICA 1999). In 2001, the AICPA issued SAS No. 94 to warn auditors that a substantive-only audit approach may not be feasible in complex IT environments (AICPA 2001).
The AICPA recognizes the role that IT plays in educating future accountants, stating, "All professional accountants, irrespective of their primary work domain or role, must acquire both relevant theoretical knowledge and practical IT skills" (AICPA 1996, para. 12). Incorporating technology such as generalized audit software (GAS) into the classroom exposes students to current audit practices (Nieschwietz et al. 2002) that can be used for any audit requiring data extraction and analysis. Accounting firms and internal auditing functions are increasingly utilizing GAS because of its user-friendly interfaces and its ability to quickly examine 100 percent of a population (Lanza 1998; Sayana 2003). GAS efficiently performs many manual procedures, allowing auditors to focus on understanding clients' businesses and creating more value for the client (Lanza 1998).
Larger firms initially used internally developed GAS programs that required specialized programming knowledge. As the storage and processing capabilities of PCs have increased, firms have generally abandoned the proprietary GAS programs in favor of commercial GAS programs, which do not require any programming knowledge (Warner 1998). GAS is used by hundreds of organizations across the world, including all Big 4 accounting firms, hundreds of governmental agencies, and almost all of the Fortune 100 firms (ACL Services Ltd 2004). Moreover, almost 50 percent of internal auditors report using GAS in their operations (McCollum and Salierno 2003). This increased popularity of GAS in practice, together with its user-friendly interface, makes it a serious candidate for inclusion in courses such as accounting information systems, auditing, and information systems auditing.
Audit Software as a Learning Mechanism
Horsfield (1995) suggests that auditing students should understand the following three areas: audit theory, the relationship between audit theory and audit practice, and current audit techniques. Unfortunately, traditional audit classes do not provide students with concrete experience (Siegel et al. 1997). Incorporating audit software into the audit curriculum can reinforce students' understanding of audit concepts (Nieschwietz et al. 2002). In terms of Bloom's (1956) taxonomy, instructors can use audit software as a learning mechanism to move students from knowledge and comprehension of audit concepts to application of those concepts, and with well-designed instructional cases, perhaps to analysis, synthesis, and evaluation of audit problems. Specifically, using audit software in conjunction with comprehensive audit cases can develop strategic and critical thinking skills (Gelinas et al. 2001), defined as the accountant's ability to "link data, knowledge, and insight to provide quality advice for strategic decision making" (AICPA 1999, 17).
Bryant and Hunton (2000) note that research addressing educational technology in the accounting discipline is not as well developed as in the pure educational research realm. The most recent accounting research into education technology is descriptive rather than empirical and focuses on distance learning and hypermedia (Bryant and Hunton 2000). Thus, research has not empirically shown the value of incorporating audit software into the accounting curriculum. In the last two years, accounting education journals have included a small number of instructional cases using audit software (e.g., Gelinas et al. 2001; Nieschwietz et al. 2002). Gelinas et al. (2001) report that their students agree or strongly agree that using the audit software supplemented their understanding...
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