Types of Audit Programme


Types of Audit Programme

Definition: A fixed audit programme may be defined as a plan based on organized thinking and deep deliberations and contains general, standardized and all conceivable audit instruction and procedures irrespective of their applicability to the audit engagement.

Drawback of fixed audit programme are:
a. Fixed audit programme lays down a rigid framework for conducting audit examination.
b. Audit staff members are not free to use their own imagination and initiative.
c. It is unsuitable in case of clients where working conditions may vary from year to year.

Existing Concept of Fixed Programme
An audit process, from initial planning through formation of final audit opinion, is highly complex. From a liability point of view professional auditing firm cannot afford to allow each and every one of their qualified staff to determine their own personalized audit programme. Audit Manuals prepared by large audit firms dictate the course of both compliance and substantive audit testing, are an integral part of whole audit process Standardized audit testing, are an integral part of whole audit process. Standardized audit programme are made available for the following areas of audit work.

Liabilities
a. Share capital
b. Reserves
c. Borrowing-debentures, loans, etc
d. Creditors

Assets
a. Bank and cash transactions
b. Debtors
c. Investments
d. Stock and work-in-progress
e. Fixed assets
f. Inter-company accounts

General
a. Analytical review
b. Commitment and contingencies
c. Minutes of directors
d. Minute of AGM
e. Taxation
f. Statutory books
g. Balance sheet
h. Profit and loss account items

The standardized audit programme in respect of these items are not rigid but are only intended to be used as an indication of the way in which the areas should be audited. Such programme provide lowest common requirements and all audits should be carried out at least at that level. The audit manager should always modify such programme under specific situations.

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