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Audit Program

An audit program outlines the procedures an auditor and staff will follow to evaluate a client's financial statements. It serves as a plan, instruction guide, record of work done, and proof that work was completed. When preparing an audit program, an auditor considers the audit scope, evidence needed, applicable procedures, potential errors, and how to coordinate related items. An audit program provides training, allows work progress monitoring, ensures uniformity, fixes responsibility, and facilitates review. It helps avoid oversight and provides legal evidence of a thorough audit.

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Sunaina Zaki
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261 views

Audit Program

An audit program outlines the procedures an auditor and staff will follow to evaluate a client's financial statements. It serves as a plan, instruction guide, record of work done, and proof that work was completed. When preparing an audit program, an auditor considers the audit scope, evidence needed, applicable procedures, potential errors, and how to coordinate related items. An audit program provides training, allows work progress monitoring, ensures uniformity, fixes responsibility, and facilitates review. It helps avoid oversight and provides legal evidence of a thorough audit.

Uploaded by

Sunaina Zaki
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Audit Program

An audit program is a written scheme of the


exact details of the work to be done y the
auditor and his staff in connection with a
particular audit. It is generally contained in the
audit notebook and is invariably in black &
white. One audit program is prepared for one
audit.
Definition:
According to Howard Statler,
“The program is an outline of all
procedures to be followed in order to arrive at
an opinion concerning a client’s financial
statement.”
How it is Prepared
The audit program must be developed with due
care and skill. Particular attention should be given
to the following;
• Exact scope of the duties of an auditor.
• Books of original entry and ledger in use.
• The system of book keeping employed, and its
weakness.
• System of internal check and the extent of its
reliability.
Purpose of Audit Program
An audit program is prepared with the following
purposes:
• That is served as a plan of attack on the particular
verification problem at hand.
• That is contains instructions to assistants engaged in
the audit.
• That it serves as a record of the work done during
the verification process. Such record is required-
(a) As a basis for review by a superior of the work
done.
(b) As a evidence of the extent of the
verification.
(c) As proof that the work was actually done if
such proof ever becomes necessary.
Consideration of Various Factors
While preparing the audit program, an auditor
should consider the following factors:-
• Scope and limitation of assignment.
• Obtaining best evidence possible.
• Using procedure applicable in circumstances.
• Covering all possibilities of errors.
• Coordinating group related items.
Advantages
1. Training Instrument
The audit program is one of the training
instruments for training the audit staff members. It
is very helpful whenever staff faces ambiguity or
complexity.
2. Progress of Work
The principal sitting in the head office can easily
check the progress of several audit simultaneously.
3. Division of Work
The work of audit can be fairly distributed
among the staff members according to their
experience and capability. In case a clerk goes
on leave, another clerk can resume his work.
4. Uniformity
Uniformity of work is achieved through audit
program because all work is planned and
performed in a significant manner.
5. Fixation Of Responsibility
In case any fraud or error has remained
undetected, the auditor can fix the responsibility
for the negligence on the part of any employee
and proper action is taken against him.
6. Useful in subsequent Years
The audit program is very helpful in subsequent
years if the auditor is appointed in the same
organization.
7. Final Review
The audit program facilitate the final review of each
audit procedures if anything, which is not taken into
consideration, should be checked in final review.
8. No chance of Overlook
It provides an assurance that no material aspect of
audit examination has been overlooked.
9. Legal Evidence
The audit program will furnish satisfactory evidence
of the thoroughness of the audit in the event of the
auditor being changed with negligence in the
performance of his duties.

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