4)Meaning Of Audit Program

Audit program is a list of work done by an auditor. The audit program provides a better understanding
to the auditor and the department being audited of the important operations to be reviewed and serves
as a record of the work to be completed to insure that nothing is omitted during the audit process. This
list of significant audit procedures should cover all major areas that the department is responsible for
and may be revised during the audit due to findings.

Procedures listed in the audit program are intended to be used as a guide for the auditor but may not be
complete for the particular activity or department being audited. They should be augmented whenever
internal control reviews or conditions indicate that additional work should be performed. All procedures
must be completed or removed as necessary.

The audit program that is created for an audit should be based on the type of operation under review
and any important findings during the preliminary fieldwork. The auditor should prepare each audit
program to fit the particular set of circumstances pertinent to that department or area.

Audit Program Definition:

Professor Meigs: says that

“Audit program is a detailed plan of audit work to be performed, specifying the procedure to be
followed in verification of each item in the financial statement and giving the estimated time required”.

Audit Program Contents

1. Name:

The audit program contains the name of client the auditor can write the name of business there is
need of complete address of the concern in case of public limited company.

2. Objectives:

It contains the objectives of the business enterprise. There are various objects of nay business unit a
small business have few objects while large companies have many objects.

3. Duration:

It contains the time limit of stating and completing audit work the duration of audit period may be
one month.

4. Date:

It contains the date of stat of an audit the auditor can consult the client before fixing the audit date
it must be convent to the management .It shows the details of audit work date wise.

5. Accounting system:
 It contains the information about accounting system .the auditor can examine the accounting
system and procedure in operation the understanding of accounting system helps to develop the audit
program.

6. Internal check:

The audit program contains the notes about the effectiveness of internal check system. The
effective internal check is helpful for auditor. He can apply test checking due to proper internal check
system if the system is not good it increases the duties of audit staff.

7. Old Reports:

It keeps the contents of old audit report. The auditor can pay full attention to old reports the
weakness reported in previous reports must not be repeated in present accounting record it is the duty
of the audit staff to the performance of management.

8. Checking Books:

It contain the detail of checking accounting books the number of books kept in stated in the
program the books are distributed among audit clerk so that whole data may be examined.

5) Internal Check is an integral function of the internal control system. It is an arrangement of duties of
the staff members in such a way that the work performed by one person is automatically and
independently checked by the other.

Objectives Of Internal Check

Following are the main objectives of Internal Check −

 To protect business from carelessness, inefficiency and fraud.

 To ensure and produce adequate and reliable accounting information.
 To keep moral pressure over staff.
 To minimize the chances of errors and frauds and to detect them easily on early stage if it is
committed.
 To divide the work in such a way that no business transaction should be left unrecorded.
 To fix the responsibility of every clerk according to the division of work.

Principles of Internal Check

Let us now understand the principles of Internal Check −

 Responsibility − Allocation of business work amongst the various staff members should be done
in such a way that their duties and responsibilities should be judiciously and clearly divided.
 Automatic check − Automatic checking of work of one employee by another forms part of a
good Internal Check system.
 Rotation − Transfer or rotation of employees from one seat to another must be followed under
good system of internal control.
 Supervision − Prescribed procedures and Internal Check should be strictly supervised.
 Safeguard − To safeguard files, securities, cheque books is also recommended in Internal Check.
 Formal Santion − Without formal sanction, no deviation should be allowed from the established
procedures.
 Reliance − Under good system, too much reliability on one employee should not be there.
 Review − From time to time, system of Internal Check should be reviewed to introduce
improvement.