Auditing is an essential part of any firm's operations. Traditionally, this has been a time-consuming process involving many face-to-face meetings and sifting through large amounts of paperwork. But as with many other parts of doing business, technology is helping to make this easier and more cost-effective.
Many auditors are now looking to move away from traditional practices in favor of a more virtual approach that allows them to conduct their work remotely. This aims to make the process more efficient and also minimize disruption for both the auditor and the business. Therefore, being asked to cooperate with a remote audit is something many firms should come to expect in the near future.
Why remote auditing is growing in popularity
Remote audits have been on the rise for a while. Advances in technology such as faster broadband connectivity, high-quality videoconferencing and cloud-based file-sharing all make it easier than ever for auditors to conduct their work remotely. This removes the need for expensive travel and makes the process more efficient.
The COVID-19 pandemic has also greatly accelerated this trend. With issues like lockdowns and social distancing making it harder for auditors to go into businesses and connect with employees (who may well be working from home themselves), switching to remote auditing practices has become a necessity rather than a convenience in many cases.
However, you shouldn't expect this to be only a short-term solution. As with many traditional working practices that have been disrupted by the pandemic, firms are reevaluating old assumptions, while new innovations promise to make future remote audits easier than ever.
For instance, Paul Stephenson, UK Managing Partner for Audit & Assurance at Deloitte, has stated that going forward his firm's work is "likely to be through a mix of in-person and virtual interactions". He added this will present new opportunities for the profession to become more inclusive and take advantage of additional flexibility.
The differences between a traditional and remote audit
The most obvious difference between a traditional audit and a remote audit - sometimes called an e-audit or virtual audit - is that the remote audit doesn’t involve any face-to-face meetings to gather evidence or undergo discussions with team members. But there's a lot more to a remote audit than simply shifting to email conversations and video meetings.
Use of the cloud helps facilitate the sharing of critical documents, which can mean there's more information available quickly. In turn, this can lead to different ways of analyzing data and can even be more effective than doing so on site.
A key benefit of remote audits is that it reduces time spent commuting to the business. This is especially useful for organizations with remote locations, or those where it may otherwise be necessary to visit several geographically-diverse offices. This means auditors can spend more time focusing on important activities rather than worrying about traveling.
Many of the logistical issues that often come with audits can also be avoided. This can range from the need to organize meeting spaces to less inconvenience for employees, as remote audits reduce the need to disrupt regular workflows.
It's also much more agile than a traditional audit. Most essential data will be available digitally today anyway, so being able to access this from anywhere via cloud storage and sharing services speeds up the process and ensures nothing is missed.
Of course, there are a few disadvantages to remote audits that it's important to be aware of, though many of these difficulties can be overcome with effective planning and communication.
For example, technology issues can be a problem in some cases. If network connections are unreliable or auditors have problems accessing company data via methods such as VPNs, this can slow down the process and lead to more frustration.
A lack of direct, face-to-face communication can also make it harder to build trust between the business and the auditor, while even on video conferencing, some non-verbal cues such as body language may be lost. It may also result in a lack of engagement from employees, as it can be easy to become distracted when meeting remotely.
Key ways to ensure you're ready for a remote audit
Whether you're preparing for an audit by your internal team or are outsourcing these operations to a specialist third party, you should now expect remote solutions to play a key role in this.
A virtual audit won't affect the fundamentals. You'll still need to look out for any telltale signs that you might be set for failure. However, there are a few ways you can prepare for these activities that may be different from a traditional audit. These include:
- Boost your network security: Ensure auditors have secure access to your data without compromising security with tools like VPNs, password-protected documents, encrypted data and Public Key Infrastructure
- Schedule regular catch ups: Managers should meet with auditors regularly to discuss any issues, such as a lack of access or communication
- Test your infrastructure: It's important to identify and check all the tools you'll use as part of the audit, such as videoconferencing software, webcams and internet connectivity. Also make sure all participants know how to use it, from sharing documents to finding a suitable spot to hold a video call
- Plan in advance: Your auditors should tell you early what documentation they require, so make sure this is shareable and in a format they can use remotely
- Determine the logistics: Developing a clear plan for who will be required and when as early as possible can overcome many of the issues commonly associated with remote meetings
Get this right and you can ensure that any remote audit goes off without a hitch, so that your business retains compliance without any unnecessary disruption.