In this tutorial, we will learn about the disadvantages of an audit program that is mechanical and ignores many other aspects like internal control.
Every entity has its problems; thus, staff members cannot make changes in the audit plan and cannot make suggestions. Audit work becomes mechanical when it ignores other aspects like internal control.
Rigidity:
The audit program loses its flexibility as it cannot be the same for different types of organizations. Each business has separate problems, so a single or same audit program cannot be laid down for every kind of business.
Reduces the initiative of efficient staff:
It kills the effort of capable persons. The Assistant cannot suggest any improvements in the plan.
Audit works become mechanical:
The audit program is automatic that ignores many other aspects like internal control.
New areas may be overlooked:
With time, new problems arise during the audit that may ignore in the audit program.
The remedy of disadvantages:
- The remedy in such situations is that the audit program should be flexible must always be opened to changes and improvements.
- Audit staff should be encouraged to draw the auditor’s attention to any defects in the program.
- The audit staff should be encouraged to explore thoroughly unusual transactions and not get restricted to the audit program.
- The audit program is not much use in the case of a small audit where the books to be audited are very few.
- The audit program may not complete because certain items may be left from being checked.
- The periods and the records, which are required to be tested, may not be varied systematically.
- Even a detailed audit program cannot consider every minute work involved during the audit of a business.
- Inefficient and careless auditors may sometimes try to conceal their weaknesses and defects based on the audit program.
- The audit staff tends to go ahead with the work as per the audit program. Therefore, there is no scope for adopting new techniques or additional procedures, which are necessary according to the circumstances, which arise during the audit.
| Audit Plan | Audit Program |
| Lays down the audit strategies for conducting business. | It is an outline of how the audit is to be done, who is to do what works, and within what time. |
| Plans should be made to cover, among other things: | It lays down the following audit procedures to follow: |
| Acquiring knowledge of accounting systems, policies and internal control procedures | Checking of overall disclosure and presentation of all items in the final accounts. |
| Establishing the expected degree of reliance to be placed on internal control. | Verification and valuation of assets and liabilities and ledger scrutiny. |
| Determining the nature, timing, and extent of the audit procedures to be performed. | Evaluation of internal control and preparation and submission of an audit report. |