An audit program, also called an audit plan is a list of audit procedures which an auditor and his team are planning to perform to obtain the audit evidence. In many cases the Program contains audit objectives for each area, it also contains sufficient instructions for assistants who are involved in conducting and executing the audit.
An audit plan or audit programme converts the audit strategy into a more detailed plan and includes the nature, timing and extent of audit procedures to be performed by engagement team members in order to obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably low level.
An Audit plan is the specific guideline to be followed when conducting an audit. It helps the auditor obtain sufficient appropriate evidence for the circumstances, helps keep audit costs at a reasonable level, and helps avoid misunderstandings with the client.
The audit plan shall include the following:
– A description of the nature, timing and extent of planned risk assessment procedures sufficient to assess the risks of material misstatement,
– A description of the nature, timing and extent of planned further audit procedures at the assertion level for each material class of transactions, account balance, and disclosure. (The plan for further audit procedures reflects the auditor’s decision whether to test the operating effectiveness of controls, and the nature, timing and extent of planned substantive procedures); and
– Such other audit procedures required to be carried out for the engagement in order to comply with ISAs (for example, seeking direct communication with the entity’s lawyers).
The planning for these procedures occurs over the course of the audit as the audit plan develops. Examples of items included in the audit plan could be:
• Timetable of planned audit work
• Allocation of work to audit team members
• Audit procedures for each major account area (e.g. inventory, receivables, cash etc.)
• Materiality for the procurement records as a whole and performance materiality
Any changes made during the audit engagement to the overall audit strategy or audit plan, and the reasons for such changes, shall be included in the audit documentation.
