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Step 3 – Review and Modify Your Audit Programs

You perform this step in the
Review and Modify Audit Programs
 section in the
Navigation
 pane. Here you access the suggested audit procedures for all audit area and modify them if necessary. The procedures selected should be tailored to the nature, cause, and direction of potential misstatements at the relevant assertion level. Judgment is required whether it is appropriate (or necessary) to alter the extent or timing of the procedures to adequately respond to the risk assessment.
The procedures selected should be tailored to the nature, cause, and direction of potential misstatements at the relevant assertion level. Judgment is required whether it is appropriate (or necessary) to alter the extent or timing of the procedures to adequately respond to the risk assessment.
Review the suggested procedures and delete, modify, or add to them as necessary to ensure that, based on your professional judgment, your audit adequately responds to audit risks.
Add an option on the Audit Program regeneration message to continue without regenerating the audit program.
When you finish this step, you are ready to generate the Diagnostics Report and then generate planning forms and audit programs.
Center Pane Contents
The center pane lists suggested audit procedures for the audit area based on your risk assessment and selected audit approach. In the center pane, the letter codes indicate the procedure type:
A
 = Additional
B
 = Basic Step
E
 = Extended Step
I
 = Initial Step
O
 = Other Step
The center pane lists suggested audit procedures for the audit area. You can click a
+
 icon to expand a selected category or procedure section.
In the column labeled
Assertions
 (or
Objectives
), the letters indicate the assertion or objective for which the audit procedure provides assurance. If the letter appears in a bracket, for example [E/O], the procedure only secondarily provides assurance about the assertion. If an asterisk (*) precedes a procedure, it is a preliminary step or follow-up step.
If during risk assessment, you chose to perform only basic procedures for the audit area, the procedures suggested in the center pane will consist of primarily analytical procedures.
If you chose to perform extended procedures, the suggested procedures in the center pane will include primarily analytical procedures plus all extended procedures for assertions for which you indicated there is a high risk of material misstatement (or moderate risk of material misstatement if fraud or other significant risks exist).
Right-hand Pane Contents
The right-hand pane lists all audit procedures present in the audit area selected in the
All Procedures
 dropdown menu. Use the
+
 and
-
 icons to expand and collapse the different procedure sections. Procedures currently included in your audit program appear in light gray text. Other procedures available for selection appear in dark text.
Click
Next
 to review and modify audit programs for other audit areas.
Prior Period and Current Period Procedures
There are navigational aids to help identify differences between prior period and current period audit procedures.
In the center pane a modified step
flag icon
 is displayed next to each procedure that contains differences between the current period and prior period.
note
You can toggle this icon on and off by selecting
Show Modified Step Flag
 from the
View
 menu.
Click the
flag icon
 to display the Reset Procedure window. The prior period, original PPC procedure - current period , and modified current period versions of the procedure text are displayed for comparison. Select the version of the procedure text that you want to use for the current period. Click
OK
 to confirm the change.
note
You can also access
Reset Procedure
 from the
Edit
 menu when you have a procedure highlighted in the center pane. If you are working with a non-rollforward engagement, there are only two options available in the
Reset Procedure
 window:
Original PPC Procedure
 and
Procedure as Currently Modified
.
A flag icon also appears in the right-hand pane for each audit procedure step that was selected in the prior period.
note
You can toggle this icon on and off by selecting
Prior Period Selected Steps Flag
 in the
View
 menu. The flag icons are only available in rollforward engagements. When working with a non-rollforward engagement, the
Prior Period Selected Steps Flag
 option and its associated flag icons are not available.
To aid navigation, the
green highlight box
 in the right frame always shows the location of the selected procedure text in the center pane.
Add, Modify, Delete Procedures
To add a procedure:
You can add suggested procedures or your own custom procedures.
  • To add suggested procedures to your audit program, drag and drop a procedure in the right-hand pane to the center pane:
  1. In the center pane, scroll to the location where you want to insert the procedure.
  2. From the
    All Procedures
     dropdown menu at the top of the right-hand pane, select the audit area from where you want to insert the procedure. All procedures in that audit area are displayed in the right-hand pane.
  3. Navigate within the right-hand pane and click to select the procedure that you want to add to the center pane.
  4. Drag and drop the selected procedure at the desired location.
note
The copied procedures will be treated like custom procedures.
  • To add your own custom procedures, select
    Procedure Above
     or
    Procedure Below
     (depending on where you want it to appear) from the
    Insert
     menu.
note
Custom procedures display hierarchically in the right-hand pane.
To modify a procedure:
Double-click any procedure to modify it. You can also select
Modify
 from the
Edit
 menu to edit a selected procedure. To assist reviewers, your changes appear in red.
Steps that have been modified are marked with a modified step flag. Clicking the flag opens the
Reset Procedure
 window that shows the original PPC procedure and the modified version of the procedure. If the engagement has been rolled forward from a prior period, the procedure as used in the prior period is also displayed. You can select which version you want to select. The modified step flag can be toggled between display and non-display by selecting
Show Modified Step Flag
 from the
View
 menu.
To delete a procedure:
To delete a procedure you have added, highlight the procedure in the center pane and select
Delete
 from the
Edit
 menu.
You can also drag and drop unwanted procedures from the center pane to the right-hand pane using your mouse to remove procedures from your audit program.
note
The option to
Deselect All Steps
 is available from the
Edit
 menu. This is will remove all the steps from the center pane and place them in the right-hand pane.
note
You can also modify, delete, and insert procedures and categories by right-clicking a selected procedure or category. Select an option from the short-cut menu to execute it.
Add or Delete Categories
Procedural categories can be helpful to organize your audit plans into logical hierarchies.
To add a category:
  1. Highlight the procedure or category in the center pane where you want your new category to appear.
  2. Select
    Category Above
     or
    Category Below
     (depending on where you want it to appear) from the
    Insert
     menu.
  3. In the Add Category window, enter the category name or description in the
    Enter Category Text
     field.
  4. Select the type of procedure for the new category.
  5. Click
    OK
    .
    The new category should be visible in the center pane.
To delete a category:
Highlight the category in the center pane and select
Delete
 from the
Edit
 menu.

This article applies to:

  • Product: SMART Practice Aids