The ICAEW’s discussion paper IT and the Future of the Audit points out that the auditor can use CAATs to conduct very detailed substantive tests at relatively low cost. The amount of evidence collected in this manner could reduce the need for any investigation of internal control.

The discussion paper argues that an audit based on substantive testing alone would be unacceptable to client companies because they would wish the auditor to advise them on the quality of the internal controls in their system. Discuss the merits ‘of this argument, bearing in mind the objectives of an audit.