Audit Plan refers to the scheme formulated by the auditor that comprises of strategy or approach, that is followed for carrying out audit. On the other hand, audit programme implies a range of verification procedures, which are applied to the final accounts, to acquire audit evidence, and thus helping auditor in providing an informed opinion.
While conducting the audit, the auditor requires evidence, in support of his opinion. A collection of evidence is the beginning of the auditing process. And to do so, an auditor, drafts a proper sketch of work, along with the techniques. Audit Plan and Audit Programmes are the two major tools used by the auditor for this purpose.
To a layperson, there is no difference between these two, but the fact is there is a fine line of demarcation amidst audit plan and audit programme, which we’ve compiled in the given article. Have a look.
Content: Audit Plan Vs Audit Programme
|Basis for Comparison||Audit Plan||Audit Programme|
|Meaning||Audit plan refers to the strategies or guidelines which are followed by the auditor for conducting audit.||Audit programme is the list of steps, that are to be followed by audit staff to obtain sufficient audit evidence.|
|What is it?||Basic principle of audit.||Series of examination and verification steps.|
Definition of Audit Plan
Audit Plan can be understood as the plan for carrying out the audit of an organization, which comprises of strategies or guidelines.
Audit Plan is the fundamental principle of the audit, which says that the auditor should acquire details of the business undertaken by the client. This is to ascertain the nature, time and extent of audit procedures, which is carried out by the engagement team members. Besides other facts, it should be developed to cover:
- Obtaining knowledge of client’s business, i.e. policies, accounting system, internal control procedures, etc.
- Setting up the certain degree of reliance that rests on internal control.
- Ascertaining the nature, time and extent of the procedures of the audit.
- Coordinating the audit work.
Audit planning is a regular process, which starts just after the accomplishment of the previous audit and tends to last until the accomplishment of current engagement. The audit plan should be so flexible that they can be changed or revised, as per the circumstances.
Definition of Audit Programme
An audit programme is the blueprint of the audit plan, which specifies, how the audit is to be performed, who is going to perform and what are the steps to be followed for conducting the same. It is a set of instructions, which audit staff pursues, for proper execution of audit.
Once the audit plan is formulated, an audit programme, comprising of various steps, is developed. It is nothing but a comprehensive plan for implementing audit procedures, in specific conditions, with directions for selecting the appropriate method for attaining audit objectives. It is primarily based on the size of the entity and similar other factors.
The audit programme determines what and how much evidence or facts are to be obtained and analyzed. Further, it chalks out responsibilities for the audit staff, to conduct the audit. The audit programme should be flexible enough to be revised, as per the prevailing conditions.
Key Differences Between Audit Plan and Audit Programme
The difference between audit plan and audit programme can be drawn clearly on the following grounds:
- Audit plan is defined as the scheme or design prepared by the auditor for conducting an audit, in an effective manner. On the other hand, audit programme refers to an exhaustive plan which comprises of a list of verification steps, to be implemented, to the final accounts of the organization, to collect sufficient facts and evidence, so as to facilitate the auditor for expressing the opinion.
- An audit plan is nothing but a first and foremost principle of the audit. Conversely, audit programme is a series of examination and verification steps.
- The audit plan is designed by the auditor first, after which a comprehensive audit programme comprising various steps is created.
Audit evidence, play a crucial role in auditing, as they provide the reasons, to believe that whether a particular thing is true or not. Both audit plan and audit programmes are helpful in obtaining the relevant evidence, so as to support auditor’s opinion on the report. Moreover, they keep audit cost at the reasonable level and also keeps a check on the activities of the business, if implemented in an effective way.