COVID-19 Crisis Leads to Remote Auditing
Technology, Planning, and Communication Are Key
The COVID-19 crisis has compelled most organizations to adapt quickly to new ways of doing things, and for many businesses that includes making the leap this year to a financial statement audit that is performed remotely. With shelter-in-place orders and social distancing currently in effect, remote audits offer a way to protect your staff and your auditors while fulfilling your audit requirement.
The capability to do remote audits has existed for some time, and the technology necessary for remote auditing is already in use by many audit firms. But the annual audit traditionally has presented the opportunity for important “face time” between audit firms and clients and, in many cases, both sides have been reluctant to give it up. As such, widespread adoption of remote auditing has remained elusive until now.
The COVID-19 crisis has changed all of this at least for a part of this year, and organizations that have been reluctant to embrace remote auditing are discovering its advantages.
Will my Stakeholders Accept a Remote Audit?
An audited financial statement that results from a remote audit is no different than one that results from an onsite audit, and the data and opinions contained in them are equally valid in the eyes of bankers, board members, shareholders, investors and other stakeholders.
Auditors comply with standards set by national bodies such as the Auditing Standards Board of the AICPA and accounting standards set by the Financial Standards Accounting Board (FASB), said Alan Anderson, founder of ACCOUNTability Plus and a former AICPA Senior Vice President.
“An auditor must perform procedures to enable them to provide reasonable assurance and obtain appropriate audit evidence. There is nothing in the standards that says you must be on site.”
Anderson, who has helped many accounting firms adopt the technology and procedures best suited to remote auditing, believes that “remote auditing is here to stay.”
Remote Audit Considerations
Should I Move to a Remote Audit?
One of the factors driving the move toward more remote auditing is the desire to make things as easy as possible for the audit client. Even post COVID-19, remote audits will be needed as many organizations enable staff to work flexible schedules, including working from home one or more days of the week. And some companies are downsizing their space amid increasing real estate costs, sacrificing conference rooms that formerly housed onsite audit staff. Such trends will continue to grow in popularity after work from home experiences prove successful during the coronavirus pandemic.
Moreover, as business leaders are becoming comfortable with more and more key business functions moving to the cloud, remote audits fit in with an evolving workstyle in many companies. Yours may be one of them.
Ensuring that all stakeholders within your organization are on board with the move to a remote financial audit is a good idea. Cultural issues matter, and the human touch is an important part of any relationship. If your organization needs in-person face time with your audit team lead during the audit process, make sure the audit firm knows this. Talk to them about scheduling other meetings during the year outside of the audit process to discuss broader business issues. This can help you develop a more meaningful relationship that yields actionable insights for your business.
“For years there has been no reason traditional field work cannot be completed before your auditors come on site,” said Anderson. “Doing so provides for a more efficient wrap-up in-person, or via video if preferred, with more meaningful conversations with audit managers or partners and that’s the best-case scenario for all involved.”
To learn more about remote auditing, contact our Audit & Attestation team.