Auditing - Audit Program

The success of audit plan depends on sound and solid audit Program. An audit plan is the Auditor’s plan of action. The audit Program is specially designed for each audit is a plan of the work of examination and a set of audit procedures. A written audit Program begins with the recognition of specific objectives followed by specification of procedure design to produce sufficient competent evidential matter.

An audit Program acts as a guide to arrange and distribute the work and also to check work against the possibility of omissions. Auditor should first prepare the preliminary audit Program for compliance testing of internal accounting control systems and substantive testing of accounting balance.

Compliance Test

There are two types of compliance tests to evaluate internal control system of an organization.

  • Auditor observes control procedures that leave no trail of documentation.

  • The second step involves the examination of documentation; this indicates the performance of control procedures.


Each major class of transaction and related assets perform the following steps to evaluate internal control system −

  • Determination of the accounting control system that can prevent or detect errors and irregularities.

  • To determine whether necessary procedures are prescribed and are being followed at satisfactory level.

  • Evaluation of weakness about the nature and timing of other audit procedures and the necessary suggestion to the client in this regard is to be made by the Auditor.

  • To consider the types of errors and irregularities that can occur.

Types of Audit Program

Following are the two types of audit Program −

  • Fixed
  • Flexible

Fixed Audit Program − Audit staff has to follow the instructions mentioned in the Audit Program as laid down in it without any change. Even all are not applicable to that particular organization in a particular situation. Fixed audit Program is very rigid in nature and any modification or change is Program is not easily possible.

Flexible Audit Program − Flexible Audit Program gives only the outline of the scope and the procedures to be followed instead of any fixed audit instructions. Therefore an Auditor has a choice to develop, adopt and modify an Audit Program as per the needs and requirements depending on the internal control system and other situations of that particular organization.

Advantages of Audit Program

The following are the advantages of audit Program −

  • Audit Program gives complete coverage of audit work that can be performed by the audit staff.

  • Audit Program works as a road map for the upcoming years and the audit staff can refer to this and understand the future course of action.

  • Audit Program enhances the efficiency of the audit assistants as they are very clear about their duties.

  • Audit is more systematic through audit Program.

Disadvantages of Audit Program

The following are the disadvantages of audit Program −

  • It is not of great help to small business units.

  • Audit becomes mechanical and inefficient audit assistant may also take shelter behind the audit Program.

  • Audit Program cannot be applied in uniformity to all business units as audit work of all organization cannot be the same.

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