Remote / Virtual auditing: A reward or risk?
Well during and after Covid-19, the day-to-day working structure of audit has changed a lot. With remote working arrangements and the absence of in-person meeting with clients, it’s been a real testing time for those who have joined the audit profession in 2020 and after. Many of the challenges faced by auditors are limited access to client facilities, personnel, financial records, and documentation. There is an increased need to understand the client’s risk profile and assess how the pandemic has affected their business, due to which auditors are now considering more critical view of clients business rather than just relying on numbers.
Benefits of remote auditing: There are many benefits of remote auditing, which can be summarized here:
- Better use of Technology: Now a day’s most of the entities are digitized and cloud based, allowing an auditor to access the records of clients at his own convenience.
- Virtual meetings: Auditors are wondering at the number of meetings they are attending now despite being confined at homes. Skype, Zoom and alike technology solutions have made it possible
- High reduction in Outstation travelling cost: Businesses were spending billions of money on travels annually; however remote auditing requires zero travel cost.
- Reduction in travel time: Auditors are now working in hybrid mode and travels only when required to attend the office in person
Disadvantage of remote auditing: The remote auditing also has some limitations which are summarized below:
- Limitation on physical audit: Virtual audit is not feasible for audits at floor factories or physical verification of warehouse at manufacturing company.
- Inadequate personal interaction with process owner: Personal interaction with the process owner is limited during a remote audit. Avoiding eye contact, adjusting seat, constantly restless are some of the indications can be observed more clearly during an in-person meeting
- Network interruption leading to inadequate discussion: If network connections are not reliable, they can interrupt interviews and meetings and can also limit access to the database for fetching objective evidence for review.
- Inadequate audit results: Remote audits should not be used as a cost-saving measure. They should only be considered if the audit objectives can be met, beyond any doubt.
Conclusion:
Based on the situation, remote auditing can assist in reducing digital risk, minimize traveling time and its cost, and encourage safety. But it has its own limitation. To win with remote, clients business needs to have the perfect combination of ICT and a forward-thinking tech culture. In the future, remote will continue to be an important component of auditing with its limitation to on-site visits. Tech savvy businesses will continue to leverage both solutions to create more robust and auditor-friendly strategies.
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