Firms that have been introducing and experimenting with remote audits are finding it easier to embrace and collaborate with clients through cloud audit tools. As offices vanish or become optional, remote audit engagements may become the standard as client teams and documentation are spread out across multiple locations, including home offices. In-office audits may no longer be practical or feasible for some clients.
Firms and clients are embracing remote auditing
The transition to more remote and hybrid working environments has required an adjustment for everyone. Fortunately, new technology and tools have arrived just in time to facilitate the transition, including the ability to conduct audits remotely.
Jennifer Lee Wilson coaches accounting professionals and firms on developing what they need to transform their organizations. As she explained in a May 2022 article in the Journal of Accountancy, “Auditing will be increasingly conducted remotely, and more strategic discussions and activities will happen with clients in person, outside of the audit cycle.”
Remote auditing should not be mistaken for remote auditors. Developments in business communications has resulted in a preference for email and video meetings which are enhanced by cloud-based tools for gaining access to information and deep analytics. Clients are finding it easier to communicate via email and auditors are able to spend more time focusing on the work rather than communicating to client offices.
Harold Silverman, The Institute of Internal Auditor’s Senior Director CAE and Corporate Governance Engagement, says he is clearly seeing evidence of audit leaders prioritizing technology solutions, especially now that staff budgets are beginning to recover from the initial shocks of the pandemic. Part of the impetus for the investment is witnessing how technology eased the transition to remote work for other audit functions.
As everyone at the table has become more familiar with remote work, they are open to exploring the possibility of doing more remotely and finding the technology and tools they require to do so.
Remote auditing poses challenges, but there are solutions
There is a degree of comfort in hosting audits at client’s offices. There is easier access to files and paperwork, there is a perception of control over access to information, and there may be fewer concerns over privacy and security of information. All these reasons are also relevant to many aspects of conducting business in the 21st century. However, with more organizations transitioning to remote and hybrid work environments, business services, like auditing, must find a way to meet client needs.
Success in transitioning to remote auditing lies in instilling confidence in both teams and clients. There are similar concerns on both sides around three issues: security, communication, and risk management. Fortunately, technology has evolved to provide tools with the functionality to mitigate some of these concerns.
1. Security and confidentiality
Educating clients on the types of professional, high-quality, secure technological tools that your firm is utilizing for audit engagement is important for transparency and trust.
Using tools that have been designed by and with accounting professionals in conjunction with data security experts is better than repurposed software.
In a world where we are constantly connected, addressing communication concerns may not be based so much on the quantity but on the quality of communications.
Training your audit teams to be comfortable and efficient using the tools available to them in a fashion that facilitates a “single source of truth”, a level of accountability, and information accuracy can all be attained through technology, training, and execution. The right technology allows you to provide insightful outputs and reports
Client collaboration is key. Regardless of where audits are performed, the correct information needs to be received from clients to perform the job effectively. Cloud technology allows for transparency and project management functionality. As with all good communication, it is a two-way street.
3. Risk management
In an environment where regulatory and compliance issues are constantly changing and the fines and penalties for non-compliance are high, clients may be concerned about vulnerability or exposure to changes. Firms leveraging tools such as Thomson Reuters Cloud Audit SuiteTM are confident that they are using programs with audit methodology that is backed by experienced editors and authors.
Clients are the only ones subject to accountability. In September of 2022, an audit firm and three of its senior employees were charged with improper professional conduct and agreed to pay a $3.75 million penalty. It is undeniable that audit risks have gone up over the past three years, but adoption of technology in audits has also greatly accelerated. Auditors who embraced technology can manage their risks more efficiently.
Leveraging technology key to remote audit success
Engaging in remote audits and addressing hybrid work environments demonstrates your firm is progressive and prepared for the future of auditing. Cloud audit tools make the transition much more streamlined and offer an end-to-end solution for conducting business in the modern world. If you are ready to introduce or scale up your remote audit services, more insights can be found in Audit from anywhere: Remote audit best practices for a new era of audit teams.