Undoubtedly, COVID-19 has affected us in many ways that encouraged us to find new methods in all aspects of our lives; the audit industry is no exception. Social restrictions imposed during the COVID-19 global pandemic compelled auditors to find alternative means to complete timely and quality audits.
As a result, auditors had to perform audits like never before, resulting in the hybrid auditing approach to be born through remote working tools and increased cloud-based technology. Such means allowed auditors to meet clients virtually for a Zoom call whilst performing audit fieldwork at the comfort of one’s home, amongst others. Before COVID-19, such measures were all likely to occur on-site and in-person. However, restrictions had to be implemented by firms across the globe as a way of responding to the pandemic and its call for limited social interactions. Yet, it is envisaged that such a trend in remote audit work will remain in place far after the pandemic is over.
The pandemic shifted how audits have always been performed. This shift requires audit firms to ensure they are doing their utmost to make use of all available technologies to their full potential whilst recognising and curbing any challenges to be faced through the use of remote working measures.
One way to ensure a successful remote audit is to recognise that not all work needs to be done essentially remotely; specific procedures still require face-to-face interactions with the client, such as a stock take observation. Therefore, auditors and auditees alike must be aware of the limitations that exist through virtual processes and allow for proper preparation to ensure a successful remote audit. In addition, any confidentiality issues that may arise due to remote working measures must also be considered.
All challenges that exist within remote audits need to be recognised by each team member, with one of the greatest being the maintenance of trust between the auditor and the audit client. Since in-person interactions may provide more informative and in-depth communication than virtual ones, acquiring evidence may prove to be more challenging and prone to misunderstanding if done remotely. Although it may be harder to build strong connections through video and audio calls, physical interaction is not required for parties to obtain the desired benefit of such interactions, including sharing evidence and discussions. Once, again ensuring proper preparation is critical to guarantee trust-building and safeguard professionality.
Building a relationship with the auditor remains fundamental. A high-quality audit can only occur if the lead partner and the team understand their client’s business; this requires meeting the owners, getting to know them and seeing how their business works. Issues are normally identified as auditors follow up on these conversations; therefore, not observing how a company operates on a day-to-day basis may elicit auditors to overlook specific insights.
Although audit teams may not be entering back into offices at total capacity any time soon, social interactions with colleagues and occasional company-wide events remain fundamental to safeguard their mental well-being. Audit functions that fail to adapt well to hybrid auditing and ensure a correct balance between remote working and having effective audit engagements may risk losing their effectiveness when implementing such technologies and adopting real-time assurance has never been more vital. Moreover, such hybrid audit engagements are here to stay for the foreseeable future; thus, audit leaders must find a way to make such processes work for them.
Why GCS Malta?
At GCS Malta, our audit team have established methods that ensure the quality of work produced is of a high level regardless of working remotely or in the office. Contact us today for more information.
