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CA Intermediate · Auditing and Ethics · Audit Strategy, Audit Planning and Audit Programme

CA Isha is planning the audit of Pinnacle Foods Ltd. She is considering whether to give the audit programme to the team members as a fixed checklist, or to retain flexibility. Which statement best reflects the correct position regarding the audit programme?

An audit programme sets out the nature, timing and extent of the planned audit procedures and is not a rigid checklist. It should be modified when circumstances change, with proper approval and documentation. It is prepared by the auditor, not by management.

  1. AAn audit programme is a rigid checklist and any deviation by the team shows poor quality
  2. BAn audit programme sets out the nature, timing and extent of procedures, and should be modified when circumstances require, with proper approval and documentationCorrect
  3. CAn audit programme is unnecessary if the auditor has a detailed audit strategy
  4. DAn audit programme is prepared by the management of the entity and approved by the audit committee

Explanation

An audit programme lists the planned procedures in terms of nature, timing and extent, and it is a flexible tool that can be changed as the audit progresses, with approval and documentation. Option C is wrong because the strategy is high level and the programme gives detailed procedures. Option D is wrong since the auditor prepares it.

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