Surprise check constitutes an important part of normal audit procedures. The audit procedures to be followed the auditor cannot always be a set of rules or precept. It should be flexible depending on the circumstance of each audit. An element of surprise can significantly improve the effectiveness of an audit and wherever practicable an element of surprise should be incorporated in to the audit programme.
Surprise checks are mainly intended to ascertain whether the system of internal control is operating effectively and whether the accounting and other records are prepared concurrently and kept up to date. Surprise checks would generally be appropriate in most cases. In following cases surprise checks would be effective audit procedures:
• Verification of cash and investments
• Verification of stores and inventories
• Verification of books of prime entry and statutory registers
The auditor should decide the frequency of surprise checks depending on circumstances. The weakness or any fraud or error observed during the surprise checks should be communicated to the management. The auditor should satisfy himself that the adequate action is taken the management on the matters communicated him.