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Chapter - 4 Audit Programme By: Ghalib Hussain: 2. Objectives

An audit programme is a detailed plan of the auditing work to be performed that specifies verification procedures for each financial statement item and estimates time required. It contains details like the client name, audit objectives and duration, accounting systems, internal checks, prior reports, and books to be checked. The importance of an audit programme includes supervision of work, proper distribution of work, training, legal evidence, fixing responsibility, controlling multiple audits, and future reference. There are three main types of audit programmes: standard all-purpose, tailor-made, and modified standard.

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Chapter - 4 Audit Programme By: Ghalib Hussain: 2. Objectives

An audit programme is a detailed plan of the auditing work to be performed that specifies verification procedures for each financial statement item and estimates time required. It contains details like the client name, audit objectives and duration, accounting systems, internal checks, prior reports, and books to be checked. The importance of an audit programme includes supervision of work, proper distribution of work, training, legal evidence, fixing responsibility, controlling multiple audits, and future reference. There are three main types of audit programmes: standard all-purpose, tailor-made, and modified standard.

Uploaded by

Ghalib Hussain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter – 4 Audit Programme

By: Ghalib Hussain

Q.1 What is an Audit Programme? List the factors you would bear in mind in constructing
an audit programme or list down the contents of an audit programme.

Definition
Professor Meigs defines an Audit Programme as “An audit programme is a detailed plan of the
auditing work to be performed, specifying the procedures to be followed in verification of each
item in the financial statements and giving the estimated time required”.

Contents of Audit Program


The following contents or audit plan, are used in Audit Program; or we can say things To Be
Included in Audit Programs

1. Name:
The audit program contains the name of client the auditor can write the name of business there is
need of complete address of the concern in case of public limited company.
2. Objectives:
It contains the objectives of the business enterprise. There are various objects of nay business unit
a small business have few objects while large companies have many objects.
3. Duration:
It contains the time limit of stating and completing audit work the duration of audit period may
be one month.
4. Date:
It contains the date of stat of an audit the auditor can consult the client before fixing the audit date
it must be convent to the management .It shows the details of audit work date wise.
5. Accounting system:
It contains the information about accounting system .the auditor can examine the accounting
system and procedure in operation the understanding of accounting system helps to develop the
audit program.
6. Internal check:
The audit program contains the notes about the effectiveness of internal check system. The
effective internal check is helpful for auditor. He can apply test checking due to proper internal
check system if the system is not good it increases the duties of audit staff.
7. Old Reports:
It keeps the contents of old audit report. The auditor can pay full attention to old reports the
weakness reported in previous reports must not be repeated in present accounting record it is the
duty of the audit staff to the performance of management.
8. Checking Books:
It contain the detail of checking accounting books the number of books kept in stated in the
program the books are distributed among audit clerk so that whole data may be examined.
Q2 : Discuss the advantages / importance of Audit Program.

1. Supervision Of Work
The auditor can judge the efficiency of his audit team by holding of an audit programme. He can
see at any time that what part of the work has been completed and what remains to be done.
2. Distribution Of Work
Audit programme is very useful in distributing the audit work properly among the members of the
audit team according to their talent.
3. Basic Instrument For Training
Audit programme is very useful for the new auditor. It provides training and guidance to him.
4. Legal Evidence
Audit programme is a legal evidence of work done by every assistant of the audit team. It can be
presented in the court of law if any client is taken against the auditor for negligence.
5. Fixation Of Responsibility
If any error or fraud remains undetected the responsibility of negligence will fall on the particular
assistant who has performed that job.
6. Several Audits may Be Controlled
The auditor controls the audit of various companies at the same time. In the absence of audit
programme he cannot supervise them effectively.
7. Easy Transfer
If one assistant is unable to continue the work given to him, it can be given to another person.
8. Useful For Future
On completion of an audit, it serves the purpose of audit record which may be useful for future
reference.

Q.4 What are different types of audit programmes?


There are following three distinct types of audit programmes

1) The Standard all-purpose audit programme: -


It provides best standard practice applicable to almost every engagement. It saves time and no
important matter is over- looked. On the other hand, in the opinion of others this type of
programme is stereotyped and too much mechanical. Due to complexities in the business
conditions, system of accounting and internal control, it is not always possible to follow the
standard all-purpose audit programme.

2) The tailor-made audit programme:


The tailor- made audit programme overcome the difficulties faced in the adoption of standard all-
purpose audit programme, it lists the procedures to be followed on each specific audit engagement.
It requests are “tailored” according to the engagements. However, the auditor should take care that
in the preparation of such a programme that no important steps is overlooked.
3) Modified standard audit programme:
It is a per-printed programme that outlines the usual audits procedures, common to most business
and provides space for an auditor to indicate other specific procedures applicable to the business
under examination.
It saves considerable time and chances of any important area to be overlooked and is minimized
to a great extent. As under this type of audit programmed standard list can be modified and
important steps can be inserted that are peculiar to the audit under review, it can be followed even
where the size, nature and system of accounting and internal control differs.

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