Advantages of Audit Programme: How Does it Help in Audit?

Audit Programme and its advantages:

An auditor uses many tools such as an audit plan, audit programme, etc. for carrying out his audit. An audit plan is the first step in the audit process as it lays down the overall strategies to be followed to conduct an audit. It describes the nature, timing, and extent of audit procedures to be performed by obtaining an understanding of the client’s business and its controls.

Once an audit plan is prepared, the auditor makes an audit programme that contains a set of instructions to be followed by audit staff. This audit programme helps the auditor in the proper execution and supervision of the audit. It decomposes the audit plan into proper checklists and audit steps to define in detail the actual audit procedures to be performed by the audit team. In fact, the audit programme is the next step after audit planning. For instance, an audit plan may entail identifying the areas where special audit attention is needed, gathering knowledge of business, etc., but an outline of procedures to be followed to be able to actually check those areas is what is contained in an audit programme.

Let us discuss more the meaning of “audit programme” and its advantages in the paragraphs below.

What is an Audit Programme?

An audit programme is a detailed written programme containing the various steps and procedures required to be followed in an audit. It generally determines what and how much evidence must be collected and evaluated.

It denotes a detailed plan of work to be performed, specifying clearly the audit procedures to be followed for verifying each item of financial statements and the estimated time required for it. To be more precise, an audit programme contains the exact details with regard to the conduct of an audit, describing all the work that is to be done. It serves as a guide for arranging and distributing audit work and thus, sets out the responsibilities of the entire audit team to carry out different tasks.

The importance of audit programmes is also validated in auditing standards. SA 300 issued by the Institute of Chartered Accountants of India (ICAI) requires that an auditor should prepare a written audit programme specifying in detail the work to be done for implementing the overall audit plan.

In short, an audit programme act as a checklist of audit procedures to be performed.

It is prepared by whom?

An audit programme is prepared by a senior auditor/audit staff and is documented in the audit working papers, which are the official record of planning and execution of the audit engagement.

Once prepared, the audit programme may be revised if needed to meet any changes in prevailing circumstances. The scope of the audit programme mostly depends on the size of the client’s business, the extent of reliance on internal controls, and other related factors. There can’t be any standard programme that applies to all types of situations. For example, the audit steps listed for a particular category of transactions may not be valid for all audit situations. Similarly, the audit programme prepared for a partnership firm would be different from that of a company.

Previous year’s audit programs may also be taken help of.

Hence, one cannot adopt a mechanical attitude while framing an audit programme. It has to be tailored to suit the circumstances of each case. Furthermore, auditors mostly have the flexibility to decide when to perform audit procedures. But sometimes, they may have no discretion with respect to the timing, such as while overseeing stock-taking by the client’s personnel.

Advantages of Audit Programme

The development of an audit programme is very important to conduct an audit. Some of the advantages of the audit programme are as given below:

  • Checklist:

It serves as a ready-to-use checklist of audit procedures to be performed.

  • Work allocation:

With the help of an audit programme, the audit work can be suitably assigned to audit assistants or article clerks. Work may be allocated as per the level of competence and experience of staff members.

  • Work supervision:

The auditor can easily determine the scope of work accomplished at any given point in time. As a result, the auditor can monitor and manage the progress of the work by ascertaining what part of the audit work has been completed and how much is left.

  • Fixing responsibility:

The audit programme would be beneficial not only to the audit assistants in carrying out the audit work but also to the principal auditor since he would be able to hold people accountable for individual responsibilities. Work done may be traced back to the individual staff member who performed it. This is one of the important advantages of using an audit programme.

  • Uniformity:

The performance of work can be more uniform when the same audit programme is followed from time to time, except where situations call for otherwise.

  • Team selection:

It may be helpful in the selection of audit team members and delegating responsibilities to them.

  • Coverage:

By providing a comprehensive checklist, an audit programme aids in ensuring that all critical aspects or areas of the audit are properly covered.

  • Reduces misunderstanding:

Another one of the most important advantages of the audit programme is that it gives clear instructions to the audit staff and hence, lowers the scope of misunderstanding.

  • Next year’s programme:

On completion of an audit, the audit programme acts as an audit record, which may be beneficial for future reference. It can be a valuable basis for organizing the programme for the following year, as well as for selecting team members and delegating responsibilities to them.

  • Evidence:

It could be used as evidence by the auditor if a charge is brought against him for negligence. With an audit programme detailing all audit procedures being carried out, he can demonstrate that he was not negligent and that he performed the audit with reasonable care and skill.

Disadvantages of Audit Programme

There may be some challenges associated with using an audit programme. These are as follows:

  • Different sorts of organizations cannot have the same audit programme. Each firm has its own set of issues. As a result, a single/same audit programme cannot be established for each type of organization.
  • It may eliminate the ability of efficient staff to take initiative. The audit assistants may be unable to make any changes to the plan.
  • With the passage of time, new issues that arise may be overlooked in the audit programme.
  • The auditor’s task becomes mechanical to some extent and the auditors can lose interest and initiative.
  • Drawing up an audit programme might seem time-consuming and unnecessary for a small concern.
  • Though audit programmes aid in the identification of responsibilities, inefficient employees may defend themselves by claiming that the issue was not covered by the audit programme.

Final thoughts

An audit programme is a checklist of audit procedures that an auditor must follow in order to perform an audit. An auditor signs off on each checklist item when it is done, and then puts the audit programme into the audit working papers as proof that the relevant steps of auditing were undertaken. Hence, an audit programme is of immense help and it actually builds the path through which an audit is conducted.

And as far as the limitations are concerned, they can be overcome by making sure that the audit programme should be adaptable. It must always be open to new ideas and improvements. In addition, the audit staff should be encouraged to raise the auditor’s attention to any faults in the programme. They should also be encouraged to investigate all unexpected and irregular transactions and not be just limited by the audit programme.


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Ruchi Gandhi

The author enjoys to write informational content in the domain of company law and allied laws. She takes interest in doing thorough and analytical research on legal topics. She is a CA along with MBA (Fin) and M. Com.

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