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CA Ravi Taori
(CNO-APSE.280) Audit Programme
An audit programme is commonly prepared to allocate work to team members which may include the list of
audit procedures and instructions to be followed by the member. It also estimates the duration for completing
an audit task.
Formulating an Audit Programme
Importance of Audit Programme: Provides instructions, controls proper execution, and ensures purposeful
audit by linking procedures to objectives.
Contents: Audit objectives, detailed procedures, clear instructions.
The important matters which need to be considered in this regard are:
(Shortcut: SONIA’S audit programme)
1. System of internal control and accounting procedures:
Internal Control System: Existence of internal controls ensures continuous checking of records and helps
unearth errors Auditor evaluates internal controls through review, testing and evaluation to determine reliance
for auditing procedures
Accounting System
The auditor needs reasonable assurance that transactions are properly authorized, recorded, and no transactions
have been omitted to form an opinion on the financial statement.
TOC & SAP
Auditor tests and evaluates internal controls. This determines the nature, timing and extent of substantive audit
procedures.
Examination of ICS: The auditor's examination of the internal control system should have three features
• Review and preliminary evaluation,
• Testing of compliance, Test of Controls
• Evaluation.
Audit Evidence and Opinion: Evaluating controls provides reasonable assurance to form audit opinion.
Assurance helps ensure transactions are not omitted in financial statements
2. Overall plan: (Overall Audit strategy)
Follow Overall Plan: Stick strictly to the framework of the overall plan.
Modification: Any changes to the audit programme should first lead to a revision of the overall plan after
thorough evaluation.
3. Nature of business in which the organisation is engaged:
Understand Business: Understand the nature of the business by examining its financial and accounting
structure, visiting the client's office, and observing the transaction authorization and recording process.
Visit Factory: For industrial concerns, visit the factory to understand manufacturing processes, quantitative
records, and statistics related to process losses.
Formulate Audit Programme: Formulate the audit programme based on the company's technical, financial,
and accounting setup.
4. Information as regards organisation of the business:
Client Information: To design the audit programme, the auditor must gather details about the client's history,
business, purpose of engagement, and audit completion timeline.
5. Accounting and management policies:
Historical Review: Examine financial statements from past years, especially the immediate previous year,
audited by predecessors.
Policy Consistency: Ascertain the consistent application of accounting and management policies over time.
6. Size of the organisation and structure of its management:
Organizational Complexity: The size and structure of an organization, including multiple branches and
diverse products, can intensify the complexity of examining its accounting records.
Internal Controls: Reports from the Comptroller and Auditor General indicate that some Public Enterprises

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