Final answer:
CAATs are computer-assisted audit tools that help in data validation, control testing, and substantive testing, enhancing the auditing process by handling large data volumes with speed and accuracy.
Step-by-step explanation:
CAATs are computer-assisted audit tools and scripts that auditors use to automate various audit processes. They are a critical component in the auditing process as they can streamline data validation, facilitate the testing of controls, and enhance substantive testing. These tools can handle large volumes of data with speed and accuracy, making them indispensable in modern auditing. For instance, an auditor might use CAATs to perform tasks such as searching for anomalies in financial transactions, verifying calculations in financial statements, or checking compliance with regulatory requirements.