In pre-pandemic years, remote working was generally reserved for special cases and comprised a relatively small percentage of paid work hours. During the pandemic, organizations were forced to continue to navigate remote working for almost any job, and this continued after the worst had passed as a majority of employees expressed a desire to continue remote working at least part-time. As a result, even internal and external audit organizations were forced to adapt to an on-going need for remote auditing.
Luckily, technology has evolved to enable remote auditing to at least be a feasible option for most audit organizations to consider. While internet connectivity and other limitations still create barriers to success, audit organizations are learning to create processes for remote auditing. Using image recognition software, artificial intelligence, and software that can “count things” based on a still photo or video, and more automated functionality is enabling remote auditing to be increasingly more reliable and accepted practice. We’re providing you with best practices when completing a remote audit, from planning to reporting.
The #1 best practice when performing a remote audit
A key success factor when completing a remote audit is to ensure that professional skepticism is maintained. Do not over-rely on inquiry without appropriate corroborating evidence to support conclusions. Attempt to replicate the procedures that would normally be performed in person as closely as possible. For example, turning on cameras for remote meetings to permit observation of non-verbal behaviors of the interviewee, just in case there are signs of deception that could be a red flag of fraud.
Preparing for the remote audit
Preparing for the remote audit, including communication and coordination with the client, can present obvious challenges. It can be difficult to get information from the client, as well as sharing information within the engagement team. It is particularly hard when much interaction is done through email, text, and other impersonal means due to time zone differences and more. To counter this, it’s important to establish clear communication and ensure all stakeholders understand the objectives and logistics and outline the audit process, including timelines and specific areas of focus.
Accessing documentation in a remote audit
Even without remote auditing, much documentation and evidence exist only in an automated form. Auditing “through the system” versus “around the system” is increasingly necessary, simply because clients are leveraging information and technology in accounting and financial reporting. Understanding controls over audit evidence produced electronically is more important than ever as a result. Audits are inherently becoming more data-driven. It is a fact that must be adapted to.
Conducting a remote audit
Many younger auditors benefit from “on-the-job” training and interaction with more experienced staff. However, they may be reluctant to ask for virtual help during a remote audit, as opposed to when a supervisor is in the same room and there have been more opportunities to build mutual trust and respect in real-time. Supervisors and managers must proactively create opportunities to “connect” with staff in a way that builds confidence in a team environment.
When conducting a remote audit, it’s important to consider challenges related to technology and security, such as data privacy, which require special considerations. However, there are cyber-risk management principles and other resources that can assist organizations with best practices for ensuring that there is trust in IT systems and the data that reside on them. Cloud-based functionality, exploratory analytics, virtual data storage, automated sampling, real-time auditing, and more will continue to evolve.
Reporting in a remote audit
When finalizing the remote audit, it’s important to focus on ensuring clear and comprehensive documentation of your findings and communications throughout the audit process, including detailed reporting, maintaining communication, seeking feedback, and outlining follow-up actions or next steps. This will ensure more effective and clear reporting with a smoother, transparent process.
Reporting and engagement wrap-up involves technology whether there is remote auditing or not. For example, obtaining e-signatures on management representation letters or providing reports electronically for upload into various regulatory warehouses. Workflow automation techniques will continue to evolve to make it easier for auditors to accomplish goals.
There are benefits and challenges to completing a remote audit. But one thing we know for certain, remote auditing is not going away.
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