Concept Of Audit Program

Concept Of Audit Program

After selecting senior and junior staffs, allocating the jobs to them, mentioning when to start, how to do the work etc., an auditor prepares a plan. This plan is called audit program. An auditor needs to include all the procedures in written form, objectives of each sector and all directions which are to be given to the staff members which helps in controlling their works and helps in implementing such programs into action.

* Audit program is a detailed work plan which includes the time of work and how the works are done.

* Audit program includes the procedures of audit.

* Audit program estimates the duration to complete the audit task

* Senior staffs prepare audit program to junior staffs on the basis of nature of business

* Generally accepted points are included in the audit program

* Junior staffs put tick marks in the completed tasks

The following should be included in an Audit Program

Audit program is a detailed program that helps in guiding and controlling the junior staffs. Audit program classifies the work of junior staff members which helps in the completion of the audit task without leaving any points untouched. Following points should be included in audit program:

* Detailed information on works of all the junior staff members like audit of bank/cash book, sales book etc.

* Auditor should prepare audit program putting the nature of client into consideration.

* Separate list of work assigned to assistant should be prepared by the auditor.

* Audit program should fix the time period to complete job assigned to the assistants.

Advantages Of Audit Program

Some of the advantages are:

1. Audit Program Increases Efficiency

All the responsibilities of auditor are divided among the number of staffs putting into consideration their skills and intelligence which helps in completing the audit work properly. In the same way, the works are divided among the assistant staffs on the basis of their caliber which helps in increasing efficiency.

2. Audit Program Maintains Uniformity

Works are divided among the assistant staffs; so there is no any chance of leaving non audited statements. If the work of audit is performed on the basis of audit program every year, uniformity can be maintained in the work of audit which helps to compare the report of various years

3. Audit Program Serves As Proof

Auditor can present audit program as proof if he/she has been accused of negligence and can get clearance from such accusation. Audit program can be presented in the court as well.

Disadvantages Of Audit Program

Although audit program has many advantages, it has limitations. Some of the main disadvantages of audit program are listed as follows:

1. Exclusion Of Problems Of New Technology

New techniques and technologies are used in the work of accounting. Such technology creates the problem in the work of audit but such problems and remedial measures are not included in the audit program.

2. Possibility OF Being Unsuitable

Nature and size of business differs. So, the program which is prepared at the beginning of the year remains unsuitable. Different organizations may have their own problems. So, similar type of program may not be applicable to all.

3. Audit Program Increases The Chance Of Fraud

Staffs of the client get information about the audit program in advance which increases the chance of committing frauds. Similarly, it harasses the audit staffs so they perform the work of audit carelessly which also increases the chance of committing frauds.

4. Audit Program Is Not Suitable To Small Business

Small concern has less transactions and work of audit can be completed in short period of time. So, audit program is not essential to audit such concern.