Page 44 - CA Inter Audit PARAM

CA Ravi Taori
• provides the assistant carrying out the audit with total and clear set of instructions
of the work generally to be done.
• Selection of assistants for the jobs on the basis of capability becomes easier when
the work is rationally planned, defined and segregated.
• Without a written and pre-determined programme, work is necessarily to be
carried out on the basis of some ‘mental’ plan. In such a situation, there is always a
danger of ignoring or overlooking certain books and records. Under a properly
framed programme, the danger is significantly less, and the audit can proceed
systematically.
• The assistants, by putting their signature on programme, accept the responsibility
for the work carried out by them individually and, if necessary, the work done may
be traced back to the assistant.
• Helping the auditor to devote appropriate attention to important areas of the audit.
• Helping the auditor identify and resolve potential problems on a timely basis.
• Assisting, where applicable, in coordination of work done by auditors of
components and experts.
• The principal can control the progress of the various audits in hand by
examination of audit programmes initiated by the assistants deputed to the jobs
for completed work.
• It serves as a guide for audits to be carried out in the succeeding year.
• A properly drawn up audit programme serves as evidence in the event of any
charge of negligence being brought against the auditor. It may be of considerable
value in establishing that he exercised reasonable skill and care that was expected
of professional auditor.

Disadvantages
• The work may become mechanical and particular parts of the programme may be
carried out without any understanding of the object of such parts in the whole
audit scheme.
• The programme often tends to become rigid and inflexible following set grooves;
the business may change in its operation of conduct, but the old programme may
still be carried on. Changes in staff or internal control may render precaution
necessary at points different from those originally decided upon
• Inefficient assistants may take shelter behind the programme i.e., defend
deficiencies in their work on the ground that no instruction in the matter is
contained therein.
• A hard and fast audit programme may kill the initiative of efficient and
enterprising assistants
Author’s Note

Advantages & Disadvantages of planning

Advantages:- appropriate selection & assignment of work / responsibility & accountability of work
delegated improves / clear set of instructions to juniors / systematic plan with proper emphasis on
important areas / less chances of overlooking
e.g. EPS checking omitted / identify & resolve potential problems
e.g. need of expert in inventory determination & valuation / helps in co-ordination with other auditors
/supervising audit work / helps in controlling / serves as guide
succeeding years / serves as evidence in case of charge against negligence.

Disadvantages: -Fixed Pattern Not Applicable/ Rigid/ Mechanical / Good for inefficient assistants /Bad for
efficient assistants.

QNO— Inefficient Assistant Not Going Beyond Audit Programme New Course – (SM25/S24M)
C2OC.110 Bhaskar CNO - C2OC.100
Rohit, undergoing practical training, is part of an engagement team conducting audit of a company
engaged in manufacturing of paints. He has been provided with audit programme pertaining to sales. It
lists out various items to be checked and verified by him including invoices, rate lists, posting in debtors
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