Causes contributing to academic program audit and review becoming a means of resource reallocation in higher education are considered, along with principles relevant to its management, and major issues surrounding its development and implementation. The current interest in the audit and review of established academic programs is linked to declining enrollments and budgets. The university is forced to identify and abandon or alter programs or activities that are less essential so that the vitality of that which remains is protected. Organizing principles used in program audit and review in the University of Wisconsin System are addressed. A starting principle was that the audit and review was a responsibility and activity to be conducted by the faculty, or shared governance agencies, of each institution. A second principle pointed to the need to distinguish between program audit as a process of identifying programs that should be given intensive review, and program review as the comprehensive and intensive examination of a particular program. The review, rather than the audit, would lead to recommendation that a program be phased out or changed. A third major principle developed in Wisconsin policies and procedures is that the institutional processes of audit and review should be perceived as an integral part of institutional planning, rather than a crisis reaction to fiscal stringency. Among the issues surrounding development and implementation of program audit and review are the following: whether the excision of academic programs saves money, whether external evaluations could provide more acceptable decisions than faculty members assessing the programs of colleagues, and whether audit and review would generate efficiencies in the use of resources sufficient to repay the direct costs of conducting the review. (SW)