Page 51 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
have weak internal control systems, thereby amplifying the auditor's responsibilities.

(CNO-APSE.300) Drawing up the audit programme:
Collect Information: The auditor collects necessary information.
Decide Scope: The auditor decides on the areas to be audited, including those to be detailed and those for test
checks.
Select Audit Procedures: The auditor determines the specific audit procedures for each case, which vary based
on the company's operations, organization, business nature, and account conditions.
Adjust Programme: It's impractical to create a typical audit program due to these variations.
Stages: For first-time audits, the program should be developed in three stages:
• Outline: Draw a broad outline of the audit program.
• Review: Review internal and accounting procedures, filling in details based on deficiencies in the internal
control system.
• Special Audit Procedures: After detailed checking, determine the extent of special procedures required,
such as independent verification of balances, physical inspection of assets, and testing inventory values.
Special procedures may be necessary based on the nature of the business, such as verifying tax liability
provisions for a shipping company or unexpired liability for an insurance company.
Audit Programs for Subsequent Engagements
Shortcut: FAST & Efficient
On Each Subsequent engagement, the programme should be reviewed and, if necessary, modified on
account of:
Financial Fluctuations: Reconsideration required with extraordinary increases in book debts or stock values
compared to the previous year.
Revisit the Audit plan: Continually revisit the audit plan based on internal control reviews, preliminary
evaluations, and the results of compliance and substantive procedures.
Suspicions: Address suspicions or information about company assets being misappropriated.
Turnover & Organization Changes: Modify the program due to substantial increase in turnover, or
significant changes in accounting organization, procedures, or personnel after the audit procedures were
established.
Internal Control Efficiency: Adjustments needed if internal control procedures are discovered to be less
effective than initially assumed.

Audit Execution
(CNO-APSE.320) Key Phases in the Audit Execution
Key phases in the audit execution stage are Execution Planning, Risk and Control Evaluation, Testing and
Reporting.
• Execution Planning
• Risk and Control Evaluation,
• Testing
• Reporting

(CNO-APSE.340) Execution Planning
Efficiency and Effectiveness: To ensure timely and high-quality audit results, auditors should establish a clear
execution plan and meticulously organize their work for effective and efficient completion.
Preliminary Survey: Conduct a preliminary survey to gather additional information about the area being
audited for effective planning.
Develop Audit Program: Develop a comprehensive audit program outlining the objectives, scope, and
approach of the audit.

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