Distant auditing, beforehand a rarity, rapidly turned the norm in the course of the COVID-19 pandemic. Plainly shift is right here to remain — creating each challenges and alternatives for CPAs engaged in audit work.
Over the previous two years of the COVID-19 pandemic, the auditing occupation has undergone a significant transformation. Auditors have traditionally had a substantial amount of face-to-face interplay with shoppers. Given the legacy of in-person interplay, the change-over to digital work was particularly difficult for our occupation.
Whereas companies worldwide have needed to rapidly shift to a digital mannequin when possible, this course of has been particularly difficult for auditors because of the nature of our work. As we sit up for the long run, distant auditing is probably going right here to remain.
Auditing Pre-COVID-19
The audit course of appeared very totally different earlier than the pandemic. A lot of our procedures, such because the commentary of bodily stock counts, have been accomplished in particular person at a consumer’s workplace or facility. Throughout conventional auditing occasions, auditors could be stationed at their consumer’s website, working collectively as a crew to finish the audit on a well timed foundation.
Throughout our busy season, audit groups fashioned tight bonds — each with one another and with shoppers — working side-by-side for days. These traditions had tangible benefits, together with:
- Shut contact with an organization’s staff and administration groups led to the formation of important skilled relationships.
- Audit groups, who labored in shut proximity with the Controller, Chief Monetary Officer or different officers, had the flexibility to rapidly get solutions to questions or make requests in real-time.
- Working collectively as an built-in, in-person audit crew helped to streamline processes and create efficiencies.
Auditing Throughout COVID-19
When the pandemic took middle stage, the auditing occupation started its shift to full distant work. Though a modernization in auditing was already underway, the pandemic rapidly sped up that conversion. The change was fast and transformative.
The audit course of needed to incorporate know-how greater than ever earlier than, together with the addition of video conferencing, cameras, drones and safe file-sharing platforms. With the assistance of those instruments, the trade was capable of develop protocols to conduct audits remotely. All of the sudden, most of the duties, traditionally accomplished in particular person, happened nearly.
Throughout this transition, 5 key audit processes have been disrupted:
1. Stock
That is maybe the place the best change has come. The regulators of the accounting trade, the American Institute of CPAs and the Public Firm Accounting Oversight Board, have allowed some flexibility relating to the timing of a bodily stock rely commentary, supplied that the consumer maintains a perpetual stock system and that an auditor can’t attend in particular person. As well as, an auditor could possibly current recordings of stay video streams as audit proof.
2. Doc Assortment
Typically, a lot of the paperwork requested by the auditor can be found electronically, however historically have are available paper type. This consists of, for instance, financial institution statements and confirmations from prospects, distributors and attorneys. In a distant work surroundings, the auditor must request that these paperwork be delivered electronically on to them.
3. Observations
Requirements, resembling inner management processes, require the auditor to look at a course of or process carried out by others, and a few observations are solely legitimate when carried out stay. In a distant surroundings, stay, real-time video footage, verified by the auditor, happens as an alternative.
4. Interviews
Audit groups are sometimes required to speak and conduct interviews straight with firm administration. Pre-pandemic, these discussions have been virtually at all times performed in particular person. Usually, these interactions have now shifted to digital video conferencing.
5. Audit Danger Assessments
COVID-19 has not solely modified how we conduct audits, however it has modified the substance of the audit as effectively. An auditor should now think about how COVID-19 has impacted their shoppers’ operations, together with entry to capital, liquidity and their general monetary place.
It’s a New Day in Auditing
The COVID-19 pandemic will depart long-lasting impacts on the office. For some, this implies now not having to work full-time from the workplace. On the identical time, audit work doesn’t should be 100% distant as many auditors skilled in the course of the pandemic’s peak.
What we see taking place now could be a hybrid of those two situations. Audit groups doubtless schedule time within the workplace two or three days every week to attend audit planning conferences or different in-person periods as wanted.
Many duties that have been completed by way of know-how in the course of the pandemic proceed to be completed this manner post-COVID. In different phrases, the mixing of know-how into the audit course of in the course of the pandemic was not a short-term resolution — it created a everlasting shift in the best way audits are performed.
The brand new audit course of has created efficiencies, enabling long-term flexibility for our groups. Our individuals are spending much less time commuting, much less time in conferences and fewer time at consumer websites. This in the end saves the group time and expenditures, particularly when the consumer websites are in distant areas.
It additionally means our shoppers don’t must be positioned near our bodily areas, they are often wherever on this planet. Geographic constraints now not exist, which broadens our potential buyer base.
Whereas I do miss the face-to-face interplay with shoppers, the work and partnerships proceed — simply in a extra fashionable, environment friendly and totally different manner.
