Introduction
The global outbreak of the COVID-19 pandemic has resulted in major changes in the way we conduct several businesses across the world. The world of auditing has been no exception in this regard. Due to social distancing rules and the health risks involved, auditing firms have had to use new methods to ensure safety and audit completeness (Castka & Searcy, 2023). Remote audits have gained momentum over the past year due to the pandemic. The COVID-19 pandemic has caused a shift to remote auditing, and although it has its benefits, firms must take certain steps to ensure that the process is successful and efficient.
Preparing for Remote Auditing: Tips for Firms
A remote audit is a type of auditing that is done remotely, taking advantage of communication technologies instead of the traditional on-site audit method. The auditor remotely accesses the client’s systems, applications, and various data sources with remote audits. Remote auditing is typically conducted through two primary formats: remote, real-time access to the client’s information systems (also known as a virtual audit) and the auditor’s access to data stored in a secure environment provided by the client (Mainardi, 2021). The aim of remote auditing is still to review, assess, and attest to financial and non-financial information provided by the client, as an on-site audit would.
Conducting an audit remotely can be a complex undertaking, as it involves unique challenges and considerations. Thus, firms should take the necessary steps to prepare appropriately. The first step to take as an auditing firm is to make sure all relevant stakeholders are aware of the move to remote auditing and their roles in the process (Mainardi, 2021). Secondly, firms should strategically choose the audits that will shift to remote auditing.
Thirdly, the firm must ensure that there are provisions in place to tackle any challenges, including contingency plans, if remote auditing is not feasible (Lois et al., 2020). Finally, firms should ensure a clear communication plan to manage any security issues that may arise. A well-executed remote auditing plan will ensure that the quality of auditing work is not compromised while guaranteeing the safety of everyone involved.
The Most Difficult Aspects of a Remote Audit
Remote auditing may present challenges that require technical solutions to resolve. Some major challenges that firms face with remote auditing include the need for real-time access to the client’s data and systems, as well as the lack of access to the client personnel (Lois et al., 2020). For instance, communication barriers may result in misunderstandings that could cause audit delays or risk of incomplete audits. Additionally, auditors may encounter difficulties identifying potential fraud, typically requiring a physical presence within the client’s premises.
A remote audit also requires technology and, therefore, creates cybersecurity risks. As auditors access confidential client information, it’s essential that the data is secure and that they can only access relevant data. Firms should remain vigilant in securing data access to prevent risks like cyber breaches (Lois et al., 2020). There is also the matter of ensuring the quality of the audit without the benefit of face-to-face communication. Remote auditors rely mainly on digital communication with the client, which could cause misunderstandings and exchange misunderstandings.
Conclusion
Overall, remote auditing has become more popular due to the COVID-19 pandemic. Although remote auditing doesn’t entirely replace traditional auditing, the need for remote auditing has become more critical in the current conditions. Auditing firms that want to remain relevant and provide quality services to their clients must find ways to adapt to this new way of conducting audits. Accordingly, firms must plan and prepare thoroughly to ensure both data security and audit quality. Understanding the most difficult parts of remote audits and taking steps to mitigate them will help auditing firms navigate the new normal.
References
Castka, P., & Searcy, C. (2023). Audits and COVID-19: A paradigm shift in the making. Business Horizons, 66(1), 5-11. Web.
Lois, P., Drogalas, G., Karagiorgos, A. and Tsikalakis, K. (2020). Internal audits in the digital era: Opportunities, risks, and challenges. EuroMed Journal of Business, 15(2), 205-217. Web.
Mainardi, R. L. (2021). Beyond audit: Auditing remotely and delivering value. Wiley.