PERT (PROGRAM EVALUATION AND REVIEW TECHNIQUE) AND PERT/COST FOR AUDIT PLANNING AND CONTROL

• NCJ Number: 63784
• Journal: Journal of Accountancy Volume: 144 Dated: (NOVEMBER 1977) Pages: 82-91
• Author(s): J L KROGSTAD; G GRUDNITSKI; D W BRYANT
• Date Published: 1977
• Length: 10 pages
• Corporate Author: American Institute of Certified Public Accountants
• Publication Format: Article
• Language: English
• Country: United States of America

Annotation

THE PROGRAM EVALUATION AND REVIEW TECHNIQUE (PERT) AND PERT COST ARE ADVANCED AS USEFUL COMPUTER PACKAGE TOOLS FOR PLANNING AND CONTROLLING AN AUDIT.

Abstract

PERT IS AN ACTIVITY-NETWORK MODEL DESIGNED FOR PLANNING, COORDINATING, AND CONTROLLING COMPLEX PROJECTS WITH MANY INTERRELATED TASKS. THIS ARTICLE FOCUSES ON HOW THIS READILY AVAILABLE COMPUTER PACKAGE CAN BE OF PRACTICAL VALUE TO AUDITORS IN SCHEDULING AUDIT WORK, IN ALLOCATING PERSONNEL RESOURCES, IN PREDICTING ENGAGEMENT COMPLETION TIME, IN ESTIMATING AUDIT COSTS, IN ANTICIPATING WORK BOTTLENECKS, AND IN GUIDING AUDIT ACCELERATION. A SIMPLIFIED, HYPOTHETICAL AUDIT ENGAGEMENT IS PRESENTED TO DEMONSTRATE THE PRINCIPAL FEATURES AND ADVANTAGES ASSOCIATED WITH THE APPLICATION OF PERT IN AUDITING, WITH EXTENSIVE DIAGRAMS TO ILLUSTRATE THE NETWORK OF ACTIVITY AND TIME ESTIMATES. A MODEL FOR THE PERT COST METHOD SHOWS HOW IT ADDS PERT THE CAPABILITY FOR PLANNING, MONITORING, AND CONTROLLING AUDIT COSTS, AND FOR ANALYZING TIME AND COST TRADEOFFS. THESE MANAGERIAL TOOLS ARE INTENDED FOR AUDITORS WHO NEED TO IMPROVE AUDIT PLANNING AND CONTROL. MANY CERTIFIED PUBLIC ACCOUNTANT FIRMS ARE ALREADY EQUIPPED WITH COMPUTER FACILITIES AND CAPABLE PERSONNEL SYSTEMS TO WHICH THE PERT AND PERT COST SOFTWARE PACKAGES ARE READILY APPLICABLE. EXTENSIVE FOOTNOTES AMPLIFY THE TEXT.