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					                                             Old Dominion University                  Policy C-11
                                          Office of the University Auditor            Established Date: 3/01/01
                                                  Audit Manual                        Revision Date:    3/09/07

                                             THE AUDIT PROGRAM

General

As stated in Montgomery's Auditing:

"An audit program is a list, generally in detail, of steps to be performed in the course of an examination. It
controls the nature and extent of the examination; aids in arranging, timing, and distributing work; guards
against possible omissions and duplications; and provides part of the evidence of work done."

As a result of the work conducted during the preliminary survey phase of the audit, an audit program should
be developed which will serve as the cornerstone for the audit fieldwork. The audit program should present
audit oblectives and tests, and the analysis necessary to satisfy stated audit objectives. The audit program
should be developed by the auditor-in-charge, and be approved by the director prior to the commencement of
fieldwork. Similarly, modifications to the audit program should bear the director's approval.


Benefits

A detailed, comprehensive, well-organized audit program will provide the auditor with:

(1)    A systematic plan which facilitates communication throughout all levels of the internal audit staff;
(2)    A record of work performed and approval thereof;
(3)    A document which can be used as the starting point in the development of subsequent audit programs;
(4)    A method for comparing actual performance with planned performance;
(5)    A basis for assigning sections of the audit to subordinates; and
(6)    A method for reducing the likelihood of omissions or duplications.

Components of the Audit Program

An audit can be viewed as containing three levels of detail. First, the scope of an audit defines the parameters
within which the audit will be conducted. For example, the scope of an audit might be "to evaluate the
controls and degree of compliance with policies, procedures and statutes of the procurement function of XYZ
agency."

The second level of detail is the audit objective. Audit objectives break the scope of the audit into major
segments. For example, one objective of an audit might be, "purchases of goods and services should be
properly approved and authorized." The focus, as should be evident, is considerably smaller than in the
example above.

The third, and final level of detail, is the audit test. Audit tests consist of specific techniques for determining
compliance with a specified criteria. An example of an audit test is, "test X% of purchase requisitions for the
months of January and June to determine if authorized signatures are present."




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                                              Old Dominion University                Policy C-11
                                           Office of the University Auditor          Established Date: 3/01/01
                                                   Audit Manual                      Revision Date:    3/09/07
Whereas objectives state what an agency or institution should do, tests prescribe procedures for determining if
controls function properly.

How to Use

Prior to beginning the audit fieldwork, each auditor who will be participating in the fieldwork should be given
a copy of all audit programs that pertain to the audit areas he/she has been assigned. These audit programs
should be reviewed by the staff members and all questions should be answered by the Auditor-in-Charge. In
addition, the entire audit program should be discussed with the audit team at a pre-audit staff meeting. This
will ensure that the entire audit team is familiar with the objectives of the audit.

The audit program will provide all staff members with a complete list of audit procedures to be performed. As
each procedure is completed, the auditor should initial the appropriate item on the audit program and
reference the audit program to the appropriate work papers.

Throughout the audit, the Auditor-in-Charge should be able to refer to the audit program and determine what
remains to be completed. The Auditor-in-Charge can also use the audit program to identify who performed
each procedure and as a reference to the appropriate work papers.

Control Considerations

The following should be considered when evaluating tests of controls in audit programs:

(1)        Are objectives consistent with the scope of the audit?
(2)        Are the selected tests appropriate and efficient for testing the compliance with objectives?
(3)        Are audit objectives adequately defined and clearly stated?
(4)        Have all controls been addressed, or have some been overlooked?
(5)        Are there any objectives and tests which should be included, but are not evident from the prior year's
           audit and preliminary survey?

Implicit in (5) above, is the necessity for reviewing preliminary survey data to determine if adequate
information was obtained, management requests were considered, flowcharts and narratives were properly
prepared and evaluated, and previous audit programs (if any) were reviewed.

How To Create An Audit Program In Audit Leverage

Audit programs are created in Audit Leverage, and are the controlling basis for where work papers for the
audit are placed. The following outline the process for creating audit programs in Audit Leverage:

      1.   Go to the Project Set-up screen under Module B.
      2.   Click on “Program Set-up” Tab.
      3.   From the Cycle drop down menu, choose “Scheduled Audit.”
      4.   Click on “Audit Program Collection.”
      5.   You will get a blank “Audit Program” screen.
      6.   Enter the Program Section, such as Preliminary Survey or the name of the Audit Objective.


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                                           Old Dominion University                Policy C-11
                                        Office of the University Auditor          Established Date: 3/01/01
                                                Audit Manual                      Revision Date:    3/09/07
   7. Enter the Audit Step Title, i.e. “Testing of Collections.”
   8. Enter the sequence number (which for each audit step should be different, with audit steps kept in
       order).
   9. In the Audit Step window, write the detailed purpose, goal, scope, etc. for this audit step, i.e. what you
       are trying to accomplish. Also noted the steps and actions that will be performed for this audit step.
   10. In the Work Performed window, write all the detailed information necessary that will describe the
       audit tests performed.
   11. From the drop down menu, fill in the appropriate Audit Step Status.
   12. All work papers associated with this audit step will be placed on the page reached by clicking on the
       “Attachments” tab (see Policy C-13 for details on attaching work papers).
   13. Once finished entering this audit step, you may enter more audit steps by clicking on the advance
       arrow at the bottom to get a blank audit step page.

To use a previously archived program (such as the standard preliminary survey program), the set up is
accomplished as follows:

   1.   From the Project Set Up Page in Module B, click the “Program Set Up” Tab.
   2.   From the “Template Name” drop down box, choose the archived program you wish to use.
   3.   Click on “Import Template.”
   4.   Audit Leverage will load the archived program for this audit.




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