Nomenclature: Also called Progressive Audit Programme or Special Audit Programme.
Definition: A flexible audit programme may be defined as a plan which only outlines general scope, character and limitations of the audit engagement, and makes no mention of audit procedures to be followed, the nature of work to be performed by individual staff, and time allocated for each item.
Under flexible audit programme, the staffs have much discretion in improving it as the audit work progresses. The staff can also display its initiative.
Construction of Audit Programme:
Audit programme containing detailed directions to audit staff regarding the audit work to be carried out is prepared to ensure intended implementation of the strategy set up in the planning memorandum.
The audit programme of different clients would of course, contain similar points but still programme for each must be written individually in the light of the needs and circumstances of each particular audit. The programme for the current audit should be based on the planning memorandum (explained separately) using previous year’s programme and working papers as a guide. The check list issued by the Institute of Chartered Accountants of Pakistan should be referred to. The audit manager should before audit steps are carried out, should review the audit programme to ensure that the planned scheme would achieve the desired objectives.
The audit steps identified in the audit programme should be detailed enough to enable the audit staff to carry out any particular audit step without seeking further instruction. So each audit step should specify the relevant documents and records, direction for test, method of selection and cross-reference to relevant points in audit manual (if any) or permanent notes on record.
Every group of audit steps should be proceeded by a statement of the relevant audit objectives. Where reliance on internal control is planned the internal control objectives relevant to the audit objectives should be included in the audit programme and cross-reference should be made to the internal control and Accounting System Evaluation Schedules.
Audit programme may differ depending upon the nature of business but the principle behind the preparation of audit programme will remain the same. The programme will usually commence with the basic and routine audit tests and will lead up to the signing of the audit opinion (i.e. audit report). Care should be taken to ensure that audit steps are not repeated under different heads.
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