Definition:
Audit programme may be defined as the auditor’s plan of action indicating the work to be accomplished, the audit tests and procedures to be followed, the persons responsible for the accomplishment of the work, and the time within which the work is to be accomplished.
Some Authoritative Definitions
“An Audit programme is a detailed plan of the auditing work to be performed, specially the procedures to be followed in verification of each item in the financial statements and giving the estimated time required”.
An audit programme is a flexible planned procedure of examination.
Meaning & Nature of the Audit Programme
Audit programme consists of a set of detailed guiding points or instructions describing the nature, timing and extent of the audit procedures required to implement the overall audit plan. It is a description, memorandum, outline or written scheme designed to identify the work to be done. It is the auditor’s plan indicating the work to be accomplished, the audit tests and procedures to be followed, the persons responsible for the accomplishment of the work, and the time within which the work is to be accomplished. The audit programme includes audit objectives for each area. The level of detail in the audit programme depends upon the complexity of audit.
It is a written scheme of the exact details of the work done by the auditor and his staff in connection with the particular work. All the work which is assigned to each member of the audit team is written in the audit programme. Audit programme guides the audit personal in work to audit be done.
Following are the methods by which the programme is carried out :
Methods of Audit Programme
1. Complete Programme:
Complete programme is on the file. Completed items are ticked off by the particular assistant. Assistant knows what he has to do. He also knows that by which date each item is to be completed.
2. Individual Programme:
According to the nature of the business auditor prepares the programme for each assistant in such cases.
3. No Any Advance Programme:
In this case auditor never prepares the programme in advance but according the progress of the work he allows to go.
Advantages of Audit Programme
1. Supervision Of Work:
The auditor can judge the efficiency of his audit team by holding of an audit programme. He is in a position to know the progress of the work. 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 f the audit team according to their talent.
3. Uniformity Of Work:
Audit programme helps in settling all the things in advance, so the uniformity of work can be achieved.
4. Basic Instrument For Training:
Audit programme is very useful for the new auditor. It provides training and guidance to him. So it is rightly called the basic instrument for training.
5. 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.
6. 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.
7. Several Audits may Be Controlled:
The auditor controls the audit of various companies at the same time. In the absence of audit programme he can not supervise them effectively.
8. Easy Transfer:
If one assistant is unable to continue the work given to him, it can be given to another person. Audit programme guides him that what is done and what is remaining.
9. Final Review:
Before signing the report, final review is made and for this purpose also auditing programme is very useful.
10. Useful For Future:
On completion of an audit, it serves the purpose of audit record which may be useful for future reference.
Disadvantages of Audit Programme
1. Not Comprehensive:
Auditors may have covered the whole field but it can not be said with certainty that all the necessary work have been done.
2. Rigidness:
Audit programme looses its flexibility. While each business have a separate problems. So audit programme can not be laid down for each type of business.
3. No Initiative:
It kills the initiative of capable persons assistant can not suggest any improvement in the plan.
4. Too Mechanical:
Such audit programme is mechanical that it ignores many other aspects like internal control.
5. Not Suitable For Small Audit:
It has been proved that audit programme is not suitable for sail audits.
6. New Problems Over Looked:
With the passage of time new problems arise which may be over looked.
Rededy of Disadvantages
The remedy in such situations is that audit programme should be flexible must he always open to changes and improvements.