Module I1:

Audit Planning,
Procedures &
Documentation
Dr. Hemal Vora
Asst. Professor
Gurukul College of Commerce,
Ghatkopar, Mumbai.
Planning is required to conduct an effective
Audit efficiently and in time, planning is based
on knowledge of clients business and
developments are made as per the needs from
time to time.
 Audit Planning
 Reason for Effective Audit

 Coverage

 Revision

 Overall Plan & Programme

 Responsibility

 Knowledge of Clients Business

 Previous Years Matters

 Discussion with Clients

  Steps / Process / Stages /
Scope in conducting the Audit
1. Pre-Audit Evidence: Type, documentation,

knowledge and preparation by clients

2. Audit Evidence: Internal controls, Transactions and

Balances

3. Audit plan: Planning and Programming

4. Audit Techniques: Inspection, observation, Inquiry,

Confirmation & analysis

5. Audit Procedures: Evaluation,Vouching, Posting,

Casting, Ledger Scrutiny, verification & disclosure

  Audit Programme
 Contains:-
1. Client Details and Accounting year
2. Audit procedures
3. Distribution of Audit work
4. Time-Table
 Types:-
1. Fixed
2. Flexible
 Advantages of Audit Programme
1. Guidance to Juniors/Assistance
2. No Repetition/Omission
3. Check list for delegation and Supervision of
work
4. Quality in Quantity
5. Allocation and Responsibility
6. Evidence in Court
7. Timely completion of Audit
 Disadvantages of Audit Programme
1. Mechanical Work
2. Work to rule
3. Rigid Time-table
4. Insufficient Evidence
5. Defense against deficiency
 Essentials of Good audit Evidence
1. Sufficient
2. Relevant
3. Reliable
  Working Papers
Audit working paper provides complete picture about the
business matter It is maintained by the audit clerk during the
course of audit. Audit working papers are the property of
the auditor. Working paper is the records of information that
has been obtained during the course of audit.

Types:
 Permanent Audit File (MOA, AOA, Questionnaires,
Flowcharts, Ratios,Trends, Communication Notes & Discussions)

 Temporary / Current Audit File (Letter of Appointments,

Documents, Plan, Programme,Analysis & Procedures)
 Functions/Importance
1. Main function
2. Plan and Perform
3. Direct, Supervise and Review
4. Record Evidence
5. Inspection
6. Prove in Court
  Audit Notebook
Audit notebook is maintained by the auditors for
recording points which are observed during the
course of the Audit. It is the part of current audit file

1. Structure

2. Objectives

3. Contents

4. Audit in Depth

5. Features of Audit in Depth

 Documents from Client:
 Letter of appointment

 MOA, AOA

 Partnership deed

 Organization chart

 Staff payments detail

 Branches, Factory Details

 Internal control and internal auditors reports

 Draft final A/c

 Minutes Book

 Production Details

 Past Annual Reports

 List of relatives of directors, Interested person, etc

 Instruction to clients
To prepare and keep ready the following details

1. All Registers

2. Complete Ledger

3. Tally Trial Balance

4. Draft Final Account

5. Computation

6. Details of Investment

7. Details of Cash in Hand, Cheques in Transit

8. Bank Reconciliation Confirmations

9. Confirmation of Balances

10. Quantity Reconciliation

11. Details of Prepaid and Outstanding