## Construction of an Audit Programme

When constructing an audit programme, seven key requirements must be satisfied:

#	Requirement	Key Idea
(i)	Prepare a written audit programme setting out all audit procedures to be applied	Must be written — not just mental
(ii)	Apply only relevant audit procedures in achieving the objective in the given circumstances	Relevance over comprehensiveness
(iii)	Determine evidence reasonably available → identify the best evidence to achieve necessary satisfaction	Quality of evidence matters
(iv)	Include audit objectives for each area + sufficient instructions for assistants	Clear guidance for team
(v)	Stay within the scope and limitations of the engagement	Do not exceed mandate
(vi)	Consider all possibilities of error	Risk-aware design
(vii)	Coordinate procedures for related items	Avoid duplication and gaps

---

### Header Information Required in an Audit Programme

Every audit programme document should include:

Field	Purpose
Name of entity	Identifies whose audit this is
Assessment Year (AY)	Identifies the period
Prepared by	Accountability for design
Approved by	Senior review and authorization
Checked by	Quality control

---

### Illustrative Audit Programme Components (Sales — Sample)

1. Cut-off date testing — verify sales recorded in the correct period

2. Top 5 customers by sales — examine on a sample basis

3. Coverage threshold — at least cover 80% of all amounts

Worked example

### Example 1

Example — Applying Point (iii): Best Evidence

For verifying debtors, evidence options include: (a) reviewing sales invoices, (b) reviewing the ledger, (c) obtaining external confirmation from debtors. The auditor determines that external confirmation is the best evidence reasonably available (highest reliability for asserting existence and accuracy). The programme is constructed to lead with this procedure.

### Example 2

Example — Applying Point (vii): Coordinating Related Procedures

Purchase transactions and the corresponding accounts payable balance are related. The auditor coordinates:

Cut-off testing for purchases (purchases team)
Creditor confirmation procedures (balances team)

...so that both teams cover complementary assertions without duplicating work or leaving gaps.

### Example 3

Example — Audit Programme Header in Practice

Entity: ABC Pvt Ltd | AY: 2024–25

Area: Revenue / Sales

Prepared by: Junior Auditor A | Date: 01-Apr-2025

Approved by: Manager B | Date: 03-Apr-2025

Checked by: Partner C | Date: 04-Apr-2025

This ensures accountability and a clear review trail before any procedure is performed.

⚠️ Common exam mistakes

Writing a mental plan instead of a formal written programme — without documentation, there is no accountability or reviewability.
Including every conceivable procedure instead of only relevant ones — the programme becomes unworkable and assistants focus on low-value work.
Omitting audit objectives for each section — assistants then perform procedures mechanically without understanding what assertion they are testing.
Not coordinating procedures for related areas — leads to duplication (e.g., both teams test cut-off for the same transactions) or gaps (no one tests a key area).
Forgetting header information (prepared by, approved by) — the programme loses its accountability and traceability.

Reference:

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

Construction of Audit Programme – 7 Key Points

Worked example

⚠️ Common exam mistakes