There are many challenges for auditors in the wake of the COVID-19 virus.  Auditors are finding new creative ways to ensure they are still meeting audit standards requirements while conducting test work during this quarantine phase.  This level of remote auditing is new for the public accounting profession and has been implemented quickly to stay on track with audit work.  Most auditors rely heavily on performing fieldwork and testing in a client’s office or at a site location.  Physical proximity restrictions, as well as travel restrictions, have demanded that auditors quickly adapt to remote auditing.

The heavy reliance on performing in-office testing has declined in the public accounting industry in the past several years.  Thankfully auditors are no longer required to haul crates of records and paperwork to a client’s office for weeks or months of fieldwork.  The ever-growing technical toolbox available to auditors means that many can perform testing from their own office.  Some of the tools available include computer-assisted audit techniques, email, data analytics, electronic workpaper binder systems, and virtual meeting programs.  In-site fieldwork allows an auditor to physically touch supporting evidence, however, documentation received through different telecommunication channels can be just as effective and provide the same level of support.  In the past auditors have relied heavily on-site visits for the performance of transaction cycle walkthroughs and control activities, inspection of physical security controls, physical inventory counts, and fixed asset testing.  Below are some of the methods that auditors may choose to use for alternative testing:

• Walkthroughs - the use of video conferencing, screen sharing and other interactive media methods provide observation support

• Inspections - real-time video calls as a client contact performs the security control procedures being tested

• Physical inventory counts - alternative testing procedures for testing inventory counts when it is unsafe or impractical to perform the testing in person are documented in AU-C Section 501, Audit Evidence - Specific Considerations for Selected Items

• Fixed asset testing - time-stamped photographs, digital camera date displays and artifact framing (including a dated newspaper with an asset in a photograph), video touring of premises and warehouses with auditors performing on the spot test counts

The audit team’s judgment plays a crucial part in the remote audit process.  The audit team’s approach to gathering sufficient appropriate audit evidence will vary, dependent on many factors, some of which are the materiality of balances, assessed risks of material misstatement, and any procedures previously performed by the audit team.  There is a significant chance that the time it takes to collect sufficient evidence will increase because of limited availability of and access to personnel and delays in management response due to alternative working arrangements. 

Changing the makeup of the audit team may be considered when the current team structure won’t meet the increased audit challenges.  More senior staff members may need to be involved in the test work of complex issues.  Also, increasing the involvement of specialists is another avenue for auditors to consider for gathering sufficient evidence.  While the environment has changed, the professional responsibilities of the auditor have not changed and require timely and high-quality adaptations to ensure all professional standards are met.