Audit programme and its advantages & disadvantages

MEANING OF AUDIT PROGRAMME

An audit programme is a detailed plan of the auditing work to be performed, specifying the procedure to be followed in verification of each item in the financial statements and giving the estimated time required. An audit programme consists of the procedure undertaken or the particular work done by an accountant in carrying out an audit. It is a description, memorandum or an outline of the work done, prepared by an auditor for the guidance and control of the assistants. It provides a guide in arranging and distributing the work and in checking against the possibility of omissions.


ADVANTAGES OF AUDIT PROGRAMME



1. All the important areas will be covered in the audit programme and thus there will be no chance of omitting any important area while conducting the audit.


2. The audit work will be allotted to the audit staff according to their efficiency and experience.


3. Audit programme facilitates better control and supervision of audit work.


4. The subsequent audit programme can be drawn on the basis of the existing audit programme.


5. If any error is found in the audit work, the person responsible for such mistake can be easily found out.


6. It serves as the evidence for conducting the audit. The auditor uses it as protection, if he is charged with negligence in performing his duties. He can prove through the audit programme that he has conducted his work with due care and diligence.


7. The efficiency of the audit staff increases and even if an audit staff goes on leave, others can continue the work by referring to the audit programme.


8. It facilitates the final review before the report is signed.


9. It is a useful basis for planning the programme for the subsequent year.


DISADVANTAGES OF AUDIT PROGRAMME


The disadvantages that may be experienced by conducting audit as per Predetermined audit programme are;


1. The audit staff may find the work mechanical, and fail to notice unusual features (if any) in the organization.


2. The audit staff may not develop any innovative techniques in audit. Initiatives on the part of the staff may not be encouraged in the per-determined audit programmes.


3. The audit staff will be more interested to complete the work in time rather than to maintain any standard in the work.


4. Staff cannot take their own decisions and they are compelled to comply with the audit programme.


5. The audit programme may not be revised from time to time even after errors noticed during the audit.


6. During the course of audit, new areas to be verified may come to the notice of the audit staff unless the audit programme is revised, such areas may escape from auditing.


7. Pr-determined audit programme may not be suitable for small organizations.