THE RECENT GROWTH OF CAATS HAS BEEN A MAJOR DEVELOPMENT IN HELPING AUDITORS DEAL WITH LARGE COMPUTERIZED SYSTEMS. IN TERMS OF AUDIT INDEPENDENCE, HOWEVER, CAATS PRESENTS TWO MAJOR ISSUES: (1) REQUIREMENTS OF ADEQUATE AUDIT CONTROL OVER CAATS APPLICATIONS TO ENSURE INTEGRITY OF RESULTS, AND (2) THE DEGREE OF RELIANCE AUDITORS PLACE ON SOFTWARE DEVELOPED BY PERSONS OTHER THAN THE AUDITOR. AUDIT CONTROLS IN THE USE OF CAATS MUST GROW FROM A PARTICULAR AUDITING CONTEXT. MAJOR TYPES OF RISK THAT MIGHT COMPROMISE A CAAT ARE AUDITOR ERROR, INADVERTENT CLIENT ERROR, PERSONAL FRAUD, AND COLLUSIVE AND MANAGEMENT FRAUD. THE ADEQUACY OF INTERNAL CONTROL, THE INHERENT RISK OF THE ITEM UNDER AUDIT, AND THE RELIANCE TO BE PLACED ON THE CAAT APPLICATION ARE RELEVANT IN ASSESSING RISK AND SHOULD, THEREFORE, BE CONSIDERED IN DETERMINING AUDIT INDEPENDENCE. WHERE AUDITORS RELY ON CLIENT-OWNED SOFTWARE, THE SOFTWARE COULD BE DELIBERATELY MANIPULATED TO INFLUENCE THE AUDITOR'S APPLICATION. AUDITORS MUST DETERMINE UNDER WHAT CONDITIONS, IF ANY, THEY CAN USE CLIENT SOFTWARE AND WHAT PRECAUTIONS SHOULD BE TAKEN. WHILE IT IS BEYONG THE SCOPE OF THIS ARTICLE TO ANALYZE SPECIFIC CONTROL PROCEDURES AND THEIR APPLICABILITY, TWO EXAMPLES ILLUSTRATE METHODOLOGY. ONE IS A DATA TESTING APPLICATION USING GENERALIZED COMPUTER SOFTWARE, AND THE SECOND EXAMPLE INVOLVES A SYSTEMS TESTING APPLICATION USING A TEST DECK. FOR BOTH EXAMPLES, A NUMBER OF AUDIT CONTROL TECHNIQUES ARE NOTED. HIGHLIGHTS OF CRITIQUES OF THE PRESENTATION ARE ALSO PROVIDED, WITH A RESPONSE FROM THE AUTHOR. (RCB)