Advantages Of Flexible Budget

Accounting , Business
Some of the notable benefits or advantages of flexible budget can be pointed out as follows:

1. Range Of Activity

Generally, static budget is prepared for single level only, but flexible budget is prepared for a range of activity. This is one of the major advantages of flexible budget.

2. Easy Comparison

Flexible budget helps to compare actual output, cost or performance with standard or budgeted output, cost and performance.

3. Cost Control

It can be used as a effective tool for cost control because flexible budget reacts to adverse situation.

Static budget is based upon assumptions, judgment, estimates and approximations. But flexible budget is prepared on the basis of knowledge and principles.

5. Flexibility

It is more flexible than static budget. It can be modified or changed according to the market situation and environment.

6. Performance Measurement

Flexible budget helps to measure managerial and operational performance.
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Disadvantages Of Budgeting

Accounting , Finance
Major limitations or disadvantages of budgeting can be pointed out as follows:

1. Based On Estimation

Budget is prepared on the basis of approximation, estimates, assumptions and judgment. So, it may lack accuracy and reliability.

2. Cost And Time Consuming

It takes more time, effort and cost to prepare budget for large sized organizations.

3. Less Flexibility

It is less flexible in nature and cannot be changed easily according to the market situation and environment.

Budgeting may demotivate employees due to the lack of participation. It may create behavioral problems. 

5. Conflict

There is a high chance of conflict because of lack of coordination among employees and coordination between, units, departments and branches.
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Advantages Of Budgeting

Accounting , Finance
The main benefits or advantages of budgeting can be pointed out as follows:

1. Goal Achievement

Budgeting provides guidelines to achieve operational and financial goals of the organization.

2. Better Coordination

It helps to maintain better coordination by linking organizational objectives and available resources in order to achieve the goal.

3. Guidelines

Budgeting provides guidelines or road map for better performance.

4. Better Decision Making

Budgeting helps the management to take wise decisions by providing proper guidelines and direction.

5. Resource Utilization

It promotes proper utilization of resources (material, labor and capital) to increase productivity and profitability.

6. Motivation

It motivates the management and employees which leads to better performance and job satisfaction.

7. Performance Evaluation

It helps to evaluate the performance of different units, departments and employees in the organization.

It helps to maintain better communication between the management and the subordinates.

9. Increase Efficiency

Because of motivation, coordination and better decision making, it helps to increase efficiency of the organizational activities. 

10. Corrective Action

It regularly monitors the progress of organizational activities and provide tool for corrective action when needed.
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Advantages Of Value Engineering

Accounting , Business
The main benefits or advantages of value engineering can be highlighted as follows:

1. Cost Reduction

Value engineering helps to reduce the cost of production without reducing the quality of the product.

2. Improved Quality

It helps to improve product quality and design to attract more customers.

3. Customers' Satisfaction

It helps to increase customers' satisfaction by fulfilling their expectations and needs without increasing the cost.

4. Simplify The Process

Value engineering simplifies the production process by eliminating unnecessary functions.

5. Higher Profit

Business firm can make more profit because of lower production cost and higher sales volume.

6. Resource Utilization

It promotes proper utilization of resources to enhance production process.
advantages of value engineering

7. Modernizing

Value engineering focuses on modern, cheaper and efficient techniques and approaches to improve the productivity.

8. Standardization

It gives emphasize on the standardization of firms' products and services.
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Advantages And Disadvantages Of Sinking Fund

Accounting , Business
Merits Or Advantages Of Sinking Fund

The main advantages of maintaining sinking fund can be pointed out as follows:

1. Replacement Of Asset

Sinking fund helps the company to replace its fixed assets by providing adequate fund.

2. Redemption Of Bond

It provides fund to redeem preference share, bond and other forms of long-term loans.

3. Improve Goodwill And Faith

It helps to maintain goodwill and faith of the company and also helps to maintain future credibility.

4. Encourage Investment

It encourages the investors to invest in the firm because of its goodwill, faith and credibility.
advantages-disadvantages-sinking-fund

5. Financial Stability

Sinking fund promotes financial stability of the business firm.

Demerits Or Disadvantages Of Sinking Fund

Some of the major drawbacks or disadvantages of sinking fund can be pointed out as follows:

1. Reduction In Profit

It reduces the profit to be distributed as dividend.

2. Complexity

It is very complex to maintain sinking fund accounts.

3. Difficulty

Although sinking fund provides fund for the replacement of old assets, it is very difficult to estimate the required amount for new assets/
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Advantages And Disadvantages Of Receipt And Payment Account

Accounting , Business
Merits Or Advantages Of Receipt And Payment Account

The main advantages  of preparing receipt and payment account can be pointed out as follows:

1. Proper Recording Of Cash Transactions

Receipt and payment account records all the cash and check receipts and payments occurred during the period properly.

2. Provides Summary

It provides a summary of all cash receipts and cash payments incurred during a period at a glance. 
advantages disadvantages receipt and payment account
3. Verification Of Cash Book

It helps to verify the cash book of the business firm. So, it ensures the accuracy of company's cash book.

Demerits Or Disadvantages Of Receipt And Payment Account

Major drawbacks or disadvantages of receipt and payment account can be highlighted as folows:

1. No Disclosure Of Profitability

Receipt and payment account cannot disclose accurate profitability of the firm.

2. No Accrual Basis

It does not show cash receipts and payments on accrual basis. 

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3. No Non-cash Transactions

Receipt and payment account fails to show non-cash transactions of the firm.

4. No Surplus Or Deficiency

It records cash and check transactions of the firm but does not disclose the surplus or deficiency of the business during the period.
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Advantage And Disadvantages Of Secret Reserve

Accounting , Business
Benefits Or Advantages Of Secret Reserve

The main advantages of creating secret reserve can be pointed out as follows:

1. Covers Future Loss And Contingencies

Creation of secret reserve helps the organization to cover future contingencies, liabilities and unknown losses.

2. Provides Financial Stability

Secret reserve helps to maintain good financial health of business because it provides financial stability by covering unexpected losses and liabilities. 

3. Internal Financing

It may be used as the source of internal financing to retain assets and other properties.

4. Additional Working Capital

Secret reserve helps to improve operational efficiency of the firm by eliminating the inadequacy of working capital by providing additional funds.

5. Image And Goodwill

It helps to maintain image and goodwill of the business and wins the public confidence. 
advantages disadvantages secret reserve
6. Equalization Of Dividend

It helps to equalize the rate of dividend which gives positive message to the shareholders.

Drawbacks Or Disadvantages Of Secret Reserve

Some of the major disadvantages of secret reserve can be pointed out as follows:

1. False And Inaccuracy

It ignores accounting norms and standard by providing false and inaccurate financial data.

2. Misuse Of Fund

There is a high chance of fraud and misuse of secret reserve by the top level management.

3. Less Profit

Creation of secret reserve decreases the amount of actual profit of the firm. So, shareholders may be disappointed.

4. Borrowing Problem

Secret profit lowers the net profit of the firm. Due to poor profit condition, banks and other financial institutions hesitate to provide loan.

5. Decrease In Share Value

Share value decreases because of  secret reserve which is not good for the shareholders and business.
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Advantages Of Petty Cash Book

Accounting , Business
The main benefits or advantages of  petty cash book can be pointed out as follows:

1. Relief To Cashier

Petty cash book relieves the main cashier because it is prepared by the petty cashier. Main cashier can focus on other major financial transactions of the business.

2. Systematic Recording

It records all the minor expenses of the business properly and systematically and provides information quickly when needed.

3. Assists Controlling

It helps to control tiny expenses of the organization by making comparison between the petty expenses of two periods.
advantages petty cash book
4. Time And Labor Saving

Petty cash book saves the valuable time of main cashier because it is maintained by the petty cashier. Because of scientific recording, it is labor saving also.

5. Minimization Of Errors

Petty cash book helps to minimize errors and frauds because it is checked regularly and reported timely.

6. Preparation Of Main Cash Book

It facilitates preparation of main cash book quickly and easily by minimizing the number of small cash transactions.

7. Division Of Labor

Petty cash book promotes division of labor in the business organization
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Benefits Of Jogging

Education , Science
The main physical and mental benefits of jogging or running can be described as follows:

Physical Benefits Of Jogging/Running

1. Prevents Heart Disease

Regular jogging minimizes the risk of heart disease. It controls high blood pressure, bad cholesterol and blood sugar level. The heart becomes more strong and pump blood properly.

2. Prevents Diabetes

This aerobic exercise lowers the risk of diabetes. Regular jogging is very useful for diabetes patients to control their sugar level. 

3. Prevents Obesity

Jogging helps to lose weight by burning extra calories. It reduces the chance of obesity by controlling unnecessary body fat. So, proper weight can be maintained with the help of running.

4. Improves Sleep

Good sleep is very necessary for physical and mental fitness. Jogging helps us sleep better.

5. Strength Muscles

This physical exercise helps to develop and strengthen our body muscles and increases the fitness level.

6. Improves Respiratory System

Regular jogging or running enhances the capacity of lungs which helps to improve respiratory system.

7. Improves Longevity

Jogging makes both physically and mentally healthy. So, it helps to reduce mortality and improves longevity. 

8. Strengthens Bones And Joints

Jugging is a weight bearing aerobic exercise. So, it helps to strengthen bones and joints in our body.
advantages of jogging
Mental Benefits Of Jogging/Running

1. Reduces Stress

Jogging improves our mental health condition which helps to reduce stress, fear and anxiety.

2. Build Confidence

Our body and mind become strong because of regular running. So, it helps to build confidence by reducing negativity. 

3. Self-sufficient

Jugging encourages us to push our capabilities without any fear and stress. So, it helps us to become more self-sufficient.
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Advantages And Disadvantages Of Double Entry System

Accounting , Finance
Advantages/Merits/Benefits Of Double Entry System

Major advantages of double entry bookkeeping system can be highlighted as follows:

1. Systematic And Scientific Method

Double entry book-keeping is scientific and systematic system of recording the financial transactions of the business. It is guided by specific rules, principles and techniques.

2. Complete System Of Accounting

Double entry system records both aspects (debit and credit) of each transaction. So, it is a complete system of book keeping.

3. Suitable For Large Companies

It is suitable for large business companies with large volume of financial transactions and resources.

4. Ensure Arithmetical Accuracy

Trial balance is prepared under double entry system. Therefore, it ensures arithmetical accuracy of accounting records.

5. To Obtained Profit Or Loss

Profit or loss of a company can be obtained by preparing profit and loss account at the end of the accounting period.

6. To Know The Financial Position

Balance sheet is prepared at the end of the year. It helps to know the actual financial position of the business.

7. Helps Decision Making

Double entry system provides provides financial data, profit, loss and financial position of the business firm. So it helps the management to take appropriate decision for the betterment of business.

8. Comparison Of Results

Financial results of current year can be compared with the result of previous year which helps the management for future planning.
advantage disadvantage double entry system
Disadvantages/Limitations/Demerits Of Double Entry System

The main drawbacks or disadvantages of double entry book-keeping system can be pointed out as follows:

1. Complex System

Double entry book-keeping is complex system of recording the financial transaction of business. It requires complete accounting knowledge to maintain the books of accounts. It is not easy to understand this method of accounting.

     Also Read:

2. Time And Cost Consuming

It requires more time to record financial transactions in the books of accounts. It requires more money to install and maintain double entry book-keeping in the organization. So, it consumes more time, money and effort as compared to single entry system.

3. Unsuitable For Small Firms

Double entry system is nor suitable for small business organizations having less number of financial transactions and resources.
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Advantages And Disadvantages Of Internal Check

Accounting , Business
Advantages/Merits Of Internal Check System

Main advantages of internal check system can be studied as follows:

1. Division Of Work

Internal check ensures proper work distribution to the employees. Accounting and operational works are distributed according to the qualification, skills and experience of the employees.

2. Easy Location Of Errors

Internal check system helps to discover errors and frauds very quickly because errors of one staff is detected by another. So, errors and frauds can be prevented before the audit.

3. Greater Efficiency

Internal check helps to increase efficiency of the employees which leads to higher productivity.

4. Preparation Of Final Accounts

It makes possible to prepare final accounts of the company (trading account, profit and loss account and balance sheet) in short time which facilitates final audit.
advantages disadvantages of internal check
5. Helpful For Auditor

Auditor can conduct final audit in short time with less effort because there is no need to examine all the accounting records in details.

6. Suitable For Large Business

It is very suitable for large business firms with many staffs, large financial transactions and large resources.

Disadvantages/Demerits Of Internal Check System

Some notable drawbacks or disadvantages of internal check system can be highlighted as follows:

1. Not Suitable For Small Firms

Internal check requires more effort, more time and more staffs. So, it is unsuitable for small business organizations having less transactions and resources.

     Also Read:

2. Creates Confusion

Internal check may create confusion among the staffs which may lead to conflict.

3. Decrease In Work Quality

Auditor completely depends on internal check while conducting final audit. It may decrease the quality of his work.

Pros And Cons Of Internal Check In Short

Pros:
- It promotes division of work
- It makes easy to locate errors, frauds and loopholes
- It boosts employee efficiency which helps to improve productivity
- It is helpful for final audit

Cons:
- It consumes extra time and cost
- It is not useful for small organizations
- It may create misunderstanding, confusion and conflict among the staffs in the firm
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Advantages And Disadvantages Of Internal Audit

Accounting , Business
Merits/Benefits Or Advantages Of Internal Audit

The main advantages of internal audit can be highlighted as follows:

1. To Discover Errors And Frauds

One of the main benefits of internal audit is that helps to discover accounting errors and frauds so that they can be rectified before the final audit.

2. To Maintain Proper Accounting

It helps to maintain proper accounting system in the organization. It ensures accuracy and authenticity of accounting records.

3. Provides Base For Final Audit

Internal audit examines and verifies entire books of accounts and locate mistakes and frauds. So, conduction of final audit becomes easier.

4. Increase Employees Efficiency

Internal audit alerts the staffs by checking their performance regularly. It helps to increase their efficiency and also helps to minimize errors.

5. Proper Utilization Of Resources

Internal audit ensures proper utilization of resources by detecting their misuse. It helps to increase operational efficiency and productivity.

advantages disadvantages internal audit

6. Valuable Suggestions

It gives suggestions and instructions regarding the financial and operational activities of the organization. So it helps to maintain better management, proper supervision and effective control.

Disadvantages/Drawbacks Or Demerits Of Internal Audit

Some of the notable disadvantages of internal audit can be highlighted as follows:

1. Not Suitable For Small Firms

Internal audit is not suitable for small business organizations with less financial and operational activities.

2. Not Acceptable

It is conducted for internal purpose only. It is not accepted by shareholders and other external users.

      Also Read:

3. Chance Of Errors

There may be a chance of errors because of the poor knowledge of the audit staff.

4. Time Consuming

It takes a long time to perform internal auditing. It may disturb regular office work.

Pros And Cons Of Internal Audit In Short

Pros:
- It detects frauds, mistakes and loopholes in the accounting system
- It makes easier to conduct final audit
- It helps to improve operational efficiency
- It provides useful information and suggestions to the management
- It is suitable for big business organizations

Cons:
- It is not useful for external reporting
- It consumes more time and effort which may hamper routine activities in the firm
- It is not suitable for small organizations having limited number of financial activities
- It may lack accuracy because of limited knowledge of internal audit personnel
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Advantages And Disadvantages Of Management Audit

Accounting , Business
Merits Or Advantages Of Management Audit

The main advantages of management audit can be studied as follows:

1. Helps In Structural Improvement

Management audit examines the functions of management and identifies the strength and weakness in management process. So, it helps to improve organizational structure according to the plans and policies of the firm.

2. Provides Valuable Suggestions

After reviewing the defects and deficiencies, it provides appropriate suggestions which helps to increase management efficiency.

3. Utilization Of Resources

Management audit helps in proper utilization of organizational resources to achieve predetermined goals and objectives.
advantages disadvantages management audit
4. Helps In Decision Making

It helps the management to take various decisions such as make or buy, sell or process further, special order, drop or continue decision etc.

5. Increase Profitability

Management audit helps to increase profitability of the firm by minimizing wastage and by utilizing resources properly. 

Demerits Or Disadvantages Of Management Audit

Some major disadvantages of management audit can be highlighted as follows:

1. Expensive System

Management audit is a costly method of auditing. So, it is not suitable for small firms having limited resources.

     Also Read:

2. Not Well-defined

Management audit lacks fixed methods and techniques of auditing. So, it is not well defined.

3. Not Suitable

Management audit provides only theoretical suggestions to the management which are not suitable or applicable to solve practical problems. 
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Advantages And Disadvantages Of Interim Audit

Accounting , Business
Advantages Or Merits Of Interim Audit

The main advantages of interim audit can be discussed as follows:

1. Less Expensive

Interim audit is less costly than continuous audit.

2. Suitable For Big Firms

Interim audit is very suitable for large and dynamic type of business organizations.

3. Helpful For Final Audit

Final audit can be conducted in short time because of interim audit.

4. Early Detection Of Errors

Errors and frauds can be located before the final audit. It helps to correct such errors and frauds in time.

5. Moral Check

It creates moral pressure on the employees to perform accounting jobs effectively. It also helps to eliminate mistakes and frauds.
advantages disadvantages interim audit
6. Interim Dividend

A firm declares interim dividend after conducting interim audit.

Disadvantages Or Demerits Of Interim Audit

The main disadvantages of interim audit can be studied as follows:

1. Alteration Of Figure

Already audited accounting figure may be changed by a dishonest employee. It may create difficulty in final audit.

2. Work Burden

Audit notes have to be prepared after the completion of interim audit. It increases the burden of work.

3. Unsuitable For Small Firms

Interim audit is not suitable for small business organizations with less financial transaction.

      Also Read:

4. Disturbance At Work

Interim audit disturbs the working environment in the office. Regular office activities may be hampered because of audit work.

5. Increase Expenses

Interim audit increases the expenses of the business.

Pros And Cons Of Interim Audit In Short

Pros:
- It consumes less cost and time
- Errors and frauds can be detected quickly
- It makes final audit easier
- It is suitable for big firms to publish interim figures

Cons:
- It may disturb regular office work
- There is a possibility of falsification of financial figures by dishonest employees
- It is not suitable for small business firms
- It increases the work load of audit staff
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Advantages And Disadvantages Of Final Audit

Accounting , Business
Merits Or Advantages Of Final Audit

Main advantages of final audit or periodical audit can be highlighted as follows:

1. Suitable For Small Firms

Final audit is very suitable for small business concerns with less number of business transactions and resources.

2. Low Cost

Periodical audit or final audit is conducted after the end of every financial year. So, it takes less cost and effort than continuous audit.

3. No Alteration Of Figure

Periodical audit is conducted only after the completion of entire accounting works. So, there is no chance of alteration or manipulation of figures.

4. No Disturbance At Work

In continuous audit, auditor frequently visits the office which may disturb the working environment. But in periodical or final audit auditor visits office only at the end of the accounting period. So, final audit does not hamper regular office work.

5. Reasonable Time

Final audit takes less time than continuous audit because auditing can be performed continuously without break.

6. True Profit Or Loss

Final audit examines the profit and loss account of the company which helps to know the true profit or loss of the business.

7. True Financial Statement

Balance sheet is properly checked by the auditor at the end of every year. It helps to know the actual financial position of the business.

8. Increase Goodwill

Periodical audit provides up-to-date information about profit, loss, financial position of the business. It helps to increase goodwill and image of the business.

Disadvantages Or Demerits Of Final Audit

Major drawbacks or disadvantages of final or periodical audit can be highlighted as follows:

1. Chance Of Error

Final audit is conducted only once in a year. So, books of accounts cannot be examined and verified properly. Due to the lack of in-depth checking there is a chance of leaving errors while conducting audit work.
advantages disadvantages final audit
2. Shortage Of Time

It is very difficult to conduct the audit of whole year in a given time frame.

3. Not Suitable For Large Companies

It is not suitable for large business companies with large volume of transactions and resources.

      Also Read:

4. Low Moral Check

In periodic or final audit, auditor does not visit clients' office frequently. So, staffs may feel free to commit frauds and errors because of no moral pressure.

Pros And Cons Of Final Audit In Short

Pros:
- It takes less cost, time and effort than continuous audit
- It shows actual profit or loss and financial health of the company
- It provides financial data and information to both internal and external users of accounting information
- It does not disturb regular organizational activities
- It improves the image and goodwill of the firm

Cons:
- It is difficult to detect planned errors and frauds
- There is a possibility of misrepresentation of financial data
- It will be difficult for the auditor to finish auditing task in limited time
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Disadvantages Of Continuous Audit

Accounting , Business
Main disadvantages or limitations of continuous audit can be expressed as follows:

1. Not Suitable For Small Business

One of the major drawbacks of continuous audit is that it is not suitable for small business firms having less numbers of financial transaction.

2. Inconvenience

It may disturb the working environment of the organization because of the frequent surprise visits of audit staffs. So, it is inconvenience system of audit.

3. High Expenditure

Continuous audit is very expensive form of audit because company has to pay high amount of audit fee frequently.
disadvantages continuous audit
4. Chance Of Alteration

There exists the chance of alteration of accounting figures after checking by the auditor. Alteration may be happened intentionally or unknowingly.
        Also Read: 

5. Increased Dependency

Because of frequent auditing, client's staff becomes more dependent upon auditor's staff for simple problems and errors.

6. Staff Intimacy

Continuous audit establishes intimacy among the staff and auditor. This intimacy may lead to frauds.
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Advantages Of Continuous Audit

Accounting , Education
Main advantages or merits of continuous audit can be pointed out as follows:

1. Quick Detection Of Errors

In continuous audit, books of accounts are checked and verified at regular interval throughout the financial year. It helps to locate accounting errors and frauds very quickly. Early detection of errors helps to rectify them sooner.

2. Useful For Large Organization

Continuous audit is very useful for large business organizations having the large number of financial transactions.

3. Quick Presentation Of Accounts

With the help of continuous audit, books of accounts can be examined and verified quickly. So, final audit report can be presented sooner.
advantages continuous audit
4. Avoids Missing Entries

Continuous audit helps to maintain proper and up-to-date records of every financial transaction. So, there will be no missing entries.
               
         Also Read: 

5. Regularity Of Staffs

Continuous audit gives moral pressure to the accounting staffs. They become regular because of regular visit of the auditor. It also motivates them to maintain proper accounts.

6. Elimination of Waste

Wastage and inefficiencies can be eliminated with the help of continuous audit. This helps to increase production and profit of the firm.
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Advantages Of Audit Note Book

Accounting , Business
Some of the notable advantages or merits of audit note book can be pointed out as follows:

1. Helps Preparing Audit Report

Audit note book helps the auditor to prepare final audit report of the business.

2. Future Reference

Audit note book provides past business information to the audit staff. So, it can be used as future reference.

3. Helps New Auditor

Audit note book records all the weakness, errors and difficulties of previous year. So, new auditor can easily understand the complexities of the business.

Audit note book helps the auditor to measure the working efficiency of his/her audit staffs.

5. Legal Evidence

Auditor can present audit note book as legal evidence in the court if he has been accused of negligence or misfeasance.
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Disadvantages Of Audit Program

Accounting , Business
Major drawbacks or disadvantages of audit program can be expressed as follows:

1. Not Suitable For Small Firms

Audit program is not suitable for small business firms having less volume of transaction. 

2. Lack Of Flexibility

Audit program lacks flexibility due to the rigidness.

3. Harasses To Staffs

Audit work should be completed within the given time by following the instructions and procedures provided in the audit program. So, it harasses to the employees.

Audit work is performed according to the audit program. Employees cannot work according to their skills and experience. They cannot give any suggestion to improve the work. So, it lacks initiative.

5. Unsuitability

Audit program is design according to the size and nature of the business. So, audit program of one business firm may not be suitable for other business organizations.
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