Audit Programme, Notebook & Documentation PDF

The auditor should plan his work to enable him to conduct an effective audit in an efficient and timely manner. Plans should be based on knowledge of the client’s business Planning an audit involves:  Establishing the overall audit strategy  Developing an audit plan  Plans should be made...

The auditor should plan his work to enable him to conduct an effective audit in an efficient and timely manner. Plans should be based on knowledge of the client’s business Planning an audit involves:  Establishing the overall audit strategy  Developing an audit plan  Plans should be made to cover, among other things: (1) acquiring knowledge of the client’s accounting systems, policies and internal control procedures; (2) establishing the expected degree of reliance to be placed on internal control; (3) determining and programming the nature, timing, and extent of the audit procedures to be performed; and (4) coordinating the work to be performed. Plans should be further developed , revised and updated as necessary during the course of the audit.  Anaudit programme consists of a series of verification procedures to be applied to the financial statements and accounts of a given company for the purpose of obtaining sufficient evidence to enable the auditor to express an informed opinion on such statements. A systematic plan of audit work to be performed.  It includes the details as to: who will do the work When the work shall be completed how exactly the work is to be performed An audit programme is carefully designed to provide the necessary audit evidence  Month Vouching Vouching Checking Vouching Vouching of cash of Bank of BRS of sales of debit book book register note register April Mr A Mr B Mr A & B Mr C Mr D 2020 @a @b 05/05/20 05/05/20 May 2020 Mr A Mr B Mr A & B Mr C Mr D @a 07/06/20 June Mr A Mr B Mr A & B Mr C Mr D 2020 Note : 1) Cash book / Bank book examination to be completed by 10th of the next month 2) Every audit asst has to put his/her initial & date in the resp box after completion of the assigned work  1) Stay within the scope and limitation of the assignment.  (2) Determine the evidence reasonably available and identify the best evidence for deriving the necessary satisfaction. This is the primary task before the auditor when he draws up the audit programme  (3) Apply only those steps and procedures which are useful in accomplishing the verification purpose in the specific situation.  (4) Consider all possibilities of error.  (5) Co-ordinate the procedures to be applied to related items.  (6)Procedures to be prescribed depend on prior knowledge of what evidence is reasonably available in respect of each transaction  It helps to fix the responsibility  Timely completion of work  Coverage of all the areas under audit  Division of work  Reviewing the work  Serves as a written record in case of the work done  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.  Work becomes mechanical  Efficient auditors lose interest  Becomes rigid & outdated if not updated  Cannot have a single audit programme for all the firms.. ( Needs to be customised)  Chances of the assistant colluding with the employee of the client  Job Rotation  Encourage participation from all audit assistants while designing  Use it as a guide  Keep on reviewing and updating it  Evidence is the very basis for formulation of opinion and an audit programme is designed to provide for that by prescribing procedures and techniques.  Itis a systematic record of work performed by the auditor relating to a particular organisation.  For each organisation there is a separate notebook  NB: An audit notebook does not literally mean a book. It may be a laptop/ Ipad/ Smart phone/ register/ diary etc…. That keeps records!!!!!!!!! General information Specific information 1) Related to the entity 1) Queries raised during audit 2) List of books of A/c 2) Explanations / Information maintained received 3) Significant Accounting policies 3) Imp points to be considered while framing audit report 4) State of Internal Control 4) Details of imp contracts system entered into by the organisation 5) List of imp. Officials/ their powers/ duties/contact details  Helps in preparing audit report  Useful as audit evidence  Serves as a guide in future  Itrefers to the record of audit procedures performed, audit evidence obtained & the subsequent conclusions reached by the auditor.  Three points  1) Procedures  2) Evidences  3) Conclusions  Tip--- Remember ‘PEC’  Assisting the engagement team to plan and perform the audit.  Assisting members of the engagement team to direct and supervise the audit work, and to discharge their review responsibilities.  Enabling the engagement team to be accountable for its work.  Retaining a record of matters of continuing significance to future audits.  Enabling the conduct of quality control reviews and inspections in accordance with SQC 1.  Enabling the conduct of external inspections in accordance with applicable legal, regulatory or other require  The Form & content is decided after taking into consideration the following:  1) Type of audit  2) complexity of the client’s business  3) Degree of internal control  4) Nature of business  5) Sources of information  6) List of records maintained Permanent working file Current working file ( relates to ( remains same every year) a particular audit year) 1) M/A, A/A, Trust Deed, Bye- 1) Letter of Engagement laws, Partnership Deed 2) Record of evaluation of 2) Audit Programme internal control system 3) Significant Accounting policies 3) Routine Observations 4) List of imp. Officials/ their 4) List of officers in Accounts powers/ duties/contact details /Finance Dept 5) List of books of A/c 5) All evidences collected maintained 6) Observations of past years 6) Confirmations received 7) Copies of audited statements 7) Conclusions reached of previous years 8) Copies of imp legal documents  Theretention period for audit engagements, as per SQC 1, ordinarily is no shorter than seven years from the date of the auditor’s report, or, if later, the date of the group auditor’s report  SQC 1 “Quality Control for Firms that perform Audits and Review of Historical Financial Information, and other Assurance and related services”, requires firms to establish policies and procedures for the timely completion of the assembly of audit files.  An appropriate time limit within which to complete the assembly of the final audit file is ordinarily not more than 60 days after the date of the auditor’s report.  Changes may, however, be made to the audit documentation during the final assembly process, if they are administrative in nature.  After the assembly of the final audit file has been completed, the auditor shall not delete or discard audit documentation of any nature before the end of its retention period as discussed above.  ICAIIntermediate Study material (new and old syllabus) - paper 6 Auditing and Assurance.  Auditing & Assurance (Auditing) | Study Material- CA Pankaj Garg, Taxmann Publications.  A Hand Book of Practical Auditing- B.N Tandon, S Sudarsnam & S Sundharababu- S. 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