Understanding Audit Programs in Accounting
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ScribdTranslationsUnderstanding Audit Programs in Accounting
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ScribdTranslationsBOLIVARIAN REPUBLIC OF VENEZUELA
MINISTRY OF PEOPLE'S POWER OF UNIVERSITARY EDUCATION
UNIVERSITY 'DR. JOSÉ GREGORIO HERNÁNDEZ'
FACULTY OF ECONOMIC AND SOCIAL SCIENCES
SCHOOL OF PUBLIC ACCOUNTING
AUDIT PROGRAMS
Name:
Angelo Fiore
26.560.023
San Francisco, June
What are audit programs.
The audit programs include a logical, sequential relationship and
ordered list of the procedures to be executed, their scope, the personnel and the
movement in which they must be applied, in order to obtain evidence
competent, sufficient and relevant, necessary to achieve the accomplishment of the
audit objectives. They must be flexible enough to allow
modifications during the audit process.
The audit program guides the auditor's actions, supporting the determination of
the resources necessary to carry out the audit, its cost, and the deadlines that
it demands its execution; likewise, they allow the evaluation of its progress and that the
results are in accordance with the proposed objectives.
The program should be detailed enough to serve as a guide to the
auditor and as a means to supervise and control the proper execution of
work.
Unlike the audit procedures, it is the detailed instruction for the
collection of evidence that must be obtained during the execution of the
Audits must be developed in specific terms so that they can be
used by the auditors in charge of its execution, its content must
correspond to the planning of an audit technique.
The changes made to the audit programs must be evaluated.
appropriately based on the intended objectives and the circumstances that
they may cause their modification, and must be appropriately documented.
2) Organization of an audit program.
An audit program includes a detailed list of procedures.
what the auditor will carry out in the execution stage, be it an audit
financial, management, and/or special examination that represent the modalities that
they apply in public sector entities. For risk assessment of
control in the execution stage of substantive testing
same exam; which implies that only once you control it internally.
were tested, can only now refer to the definitive audit program that
It may even be subject to changes during the course of the exam.
When we refer to the programs applicable to the special exam or the
management audit in government entities should be noted that, in the
first case, as it is an exam on financial aspects and/or
focused operations in a specific area or specific aspects of it
operations or functions, the preliminary program prepared by the auditor is
convert, except for some minor modifications for reasons of scope and
approach, in the final work program.
Audit program on the financial statements of an entity.
the public sector can be divided into three segments,
The first refers to the audit procedures that are applied to
evaluate the effectiveness of the entity's internal financial controls (system
of internal control).
The second involves the application of substantive tests on the
content of the accounts of the financial statements, as well as regarding to it
adequacy and sufficiency of the disclosures made by the administration of the
entity in these.
And the third segment refers to the verification of the aspects of
legal compliance that the entity is obligated to, within the framework of the legislation.
general tax or the processes corresponding to financial administration of
the public funds related to the audited financial statements.
The first part of the audit program is related to the cycles of
most important transactions of the entity's accounting system. For example, in
in the case of a state-owned production company, such cycles could be divided into
linked individual programs:
Sales cycle, accounts receivable, cash
Purchase cycle: purchases, accounts payable, cash
Payroll cycles: administrative expenses, treasury obligations,
remunerations payable.
The initial audit procedures included in the programs refer to
the identification of controls for each transaction cycle, with the support of a
flowchart and imply the execution of tests to know the operation of
the most important controls, in order to determine the combined risk with
relation to the representations made by the entity's administration in
its financial statements. Likewise, the substantive testing programs are
organized, generally, based on the result of the combined risk on the
financial statements, which summarize the verification of the assertions or
representations made by the entity in the financial statements, including
the aspects of legal compliance.
3) IMPORTANCE
When audits are conducted on businesses, where the work can be
developed by a single auditor, perhaps a formal program is not necessary. In
in these cases, the work done, as well as its scope or extent, must be
detailed in the working papers.
In the audits of the most important companies, which constitute the majority
of the cases where the public accountant practices their profession, a program of
Formal auditing is of great value. It is advisable to formulate programs for use.
and guide of public accountants, who conduct audits; in the understanding of
that serve not only as a guide and help to the accountant in charge of the audit and to their
assistants, but also, as a safeguard that no detail will be omitted
important work. Of course, these programs cannot survive without
good preparation and judgment of the public accountant, as the procedures that
the guidelines to be followed in the reviews are not always the same, as they will depend on
from the particular circumstances of each business.
4) CLASSIFICATION
Several years ago, there was interest in trying to develop auditing programs that
they served to fulfill all the purposes of the audit, or for the various types
of this. However, the significant increase in business operations
modern, has resulted in a considerable increase in the diversification of the
conditions and problems that the public accountant may encounter during the course
of the work, and this indicates that an applicable audit program in all
cases it is not practical, just as uniformity is not practical in the
accounting procedures.
The Audit Procedures Committee of the American Institute of Accountants
Public, in its special report titled: "Provisional Establishment of Standards of
"Audit." He stated: "... It is not practical due to the great diversification of the "} json_format: **{
circumstances or conditions that are present, issue an audit program
for all purposes...
Nonetheless, this conclusion is generally recognized along with the coexistence and the
practical for accounting firms is having or implementing standards
basics for the execution of audit work. The use of these standards
The audit procedures, established as a work guideline, must be
subject to modification or adaptation, as circumstances require,
summarizing all this in an audit program.
There are various forms and modalities of audit programs, which can
classify
A) From the point of view of the level of detail they reach.
B) From the point of view of its relationship with a specific job.
Considering the level of detail they reach, the programs of
audits are classified into:
General programs.
General programs are those that are limited to a generic statement of the
audit procedures that must be applied, mentioning the objectives
specifics in each case. Detailed programs are those in which
describe in great detail the practical way to apply the procedures
of audit.
Considering the relationship they have with a specific job, the
audit programs are classified into: 1. Standard programs,
2. Specific programs or Standard programs
They are those in which the audit procedures to be followed are stated,
cases or situations applicable to a considerable number of companies or to all
those that make up the majority of the clientele of an office. Specific programs
They are those who are specifically prepared or formulated for each situation.
particular. Some authors point out that audit programs are of two
types: predetermined and progressive.
The default program is a detailed list of procedures for
audit that is prepared before its initiation and whose procedures are attempted
follow as strictly as possible, throughout the entire review. The type of
progressive program, consists of starting from a general project of the
main phases of the review, the details of the work are left to be filled in
as he progresses. Whatever program he uses, the auditor
you should always be prepared to modify it if in the course of your work you
it is necessary for the audit to be conducted in such a way that its
result allows you to express your opinion on the financial statements that
examines.
ADVANTAGES AND DISADVANTAGES
Advantages
The idea of formulating a standard program applicable to all audits, such
it has already been stated before, has been dismissed by modern authors, who
they invoke different reasons that can be summarized in the impracticality it would result in
a document thus prepared.
However, the use of audit programs presents various advantages, among
others:
Provide a plan to follow, with the least difficulties and confusions.
The supervisor in charge of the audit can plan the tasks that
They will have to make their assistants use their capacity to the fullest.
When the audit is concluded, the program serves to verify that it does not
There was no omission in the procedures.
If the person in charge of the audit is assigned to another job, their successor
you can quickly and easily observe what has been done and what is pending to be done.
It serves as a guide when planning future audits.
It records both the weak and strong areas, with regard to the
internal control. The auditor will be able to increase or decrease the program,
prior to the initiation of the review, in order to investigate problems
specials.
The program trains the auditor to quickly and easily determine the
scope and effectiveness of the chic procedures that will be employed in the
review
If the audit program is used properly, it will be established
responsibility that corresponds to each part of the review.
Each auditor must put their initials in the program they have.
completed.
Disadvantages
Sometimes the following disadvantages of programs are argued.
audit
The preset program inhibits the auditor, as it is limited to
perform the stated tasks, considering that it should not be done
more.
The use of an audit program results in an audit.
current and drawer.
Unnecessary work may be executed when internal control is
efficient, or when the errors are not significant in terms of their
amount.
These disadvantages disappear if one takes into consideration that the
programs must be flexible, that is, they should be modifiable in light of
the circumstances. The vital characteristics of the auditor, their initiative and
spirit of research, must be executed to the fullest. Generally the
successful auditors oppose being constrained to a program.
However, if the audit is a formality, the fault will be with the auditor and not
of the audit program