The audit program for the previous year is the direction to the next year’s audit program, the changes in the current year audit program are called modification of audit.
The level of modification is classified into three different types:
- Based on the level of misstatements
- Based on the level of pervasiveness
- Based on the sufficiency of audit pieces of evidence
Maintaining a book:
The auditors maintain a notebook to note difficulties, errors, or important points with all the answers to the questions or doubts with clarification. The audit notebook contains a date of commencement and completion of the audit with the list of accounts maintained by entities. The chart represented the responsibilities of principal officers. The points to be discussed in the auditors meeting or question to ask for management or auditor.
Maintaining Working papers:
Working papers are supporting documents prepared by auditors in the course of their audit program. Working papers may be in the form of data, charts, images, videos, files of summaries, and analyses.
Maintaining Evidence papers:
Evidence papers represent the quality of audit with which it was performed. It should be clear, error-free, and informative, it contains the pieces of evidence from the audit program performed.
They are a permanent record of audit and is the backup material in the support of the audit. Working papers also include the documents having continuing importance, papers of partnership deeds, the duplicate copies of balance sheets of company or records.
The modification is also done to eradicate the fraud risks or errors in an audit. The fraud risk factor is important so, important is the modification in the audit program. The modification can be done on Changing the nature of the audit and the number of audit programs, more efficiently changing the timing of audit or changing the audit team.
Audit program modification begins with the consideration of worst-risk, high risk, review of the documented level of risk of material. Identify the relevant observations of the financial statements, investigate the nature, complexity of risk involved so that the level of modification can be determined and the classification on which basis the modification has to be done can be determined.
The modified audit program is the printed work that is detailed information about transactions and audits.
For maintaining the system of quality control, for developing control materials, and reviewing their development, modification is important.