The spread of COVID-19 has prompted travel restrictions worldwide and remote work policies,  it also affected routine in-person audits and official on-site inspection activities. To avoid delays and canceled or deferred audits, many firms are turning to remote or virtual audits to maintain their assurance activities until operations become normal.

It is due to the coronavirus crisis that audits departments are looking for new ways to work, traveling less, working from home more, and focusing on risks that are critical to the business. It could have a positive effect on the high rate of turnover in internal audit and may help auditors attain a better work-life balance.

Remote audit, also known as virtual audit, refers to an audit conducted remotely, using remote techniques like video conferencing, email, and telephone to obtain audit evidence. Just like technology, the audit is evolving. What was once an on-site exercise including face-to-face meetings, discussing context and leadership, touring facilities of a company for collecting audit evidence, an audit is now being carried out using electronic methods.

The overall aim is to evaluate the evidence objectively to determine the extent to which the audit criteria have been fulfilled. Auditors in a remote audit adopt standard auditing techniques, those used during on-site audits, including being open-minded, diplomatic, listening, and being respectful to the auditee. Auditors need to be versatile and collaborative and continue to ask important questions related to the scope of the audit.

‘Audit burnout’ is a common term in the audit training and certification, particularly if auditors are carrying out several one-day audits over the week, extensively traveling and writing several different reports each week. Remote auditing can give the opportunity for a different approach and outlook, adding value to both auditor, auditee, and the overall audit process.

With work-from-home becoming a norm, many auditors completed tasks that were not so complicated but the concerns for higher risk of theft, fraud, misappropriation, and malpractice still remained. They realized that they would remiss if they didn't ask the right questions and adapt plans to the risk in their environment.

The Advantages

Many auditors found that not only remote working is possible, but it can also add value and efficiency. Working remotely has forced internal auditors to be more proactive and to think outside the box. Auditors who are provided with electronic work papers, laptops, and cloud-based audit management systems by their companies are at an advantage when working remotely. The more information they have at their fingertips, the more remote auditing is possible. Sharing data, documentation, and processes review and conducting interviews without the need to commute to the audit site are some of the advantages of a remote audit.

One of the impressive examples of remote auditing is auditing banks. Using security cameras and other applications, auditors were able to observe branch operations, control, and even cash counting. The branch staff were being observed through cameras, which made it almost nearly impossible for a branch employee to perform fraudulent cash count. This approach is going to continue even after the coronavirus as it allowed auditors to spend less time traveling, limiting contact, and reducing cost.

Another important audit task that went virtual is meetings. Many auditors are amazed and also frustrated at the number of meetings they are attending now despite being confined at homes. Skype, Zoom and alike technology solutions have made it possible. These options are great to limit in-person meetings and logistics challenges.

The Disadvantages

There are certainly some disadvantages to consider too. The important thing to consider is the audit objectives, available technology, and the type of audit evidence that needs to be gathered to determine if a remote audit is suitable in the circumstances and aligned to the scope of the audit. For instance, an audit of the welding process of a steel fabricator may not be suitable to be completed remotely.

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.

Systems and networks require ongoing testing for security, connectivity, and other capabilities. If network connections are not reliable, they can interrupt interviews and meetings and may take time to resolve such connectivity issues. Such issues can also limit access to the database for fetching objective evidence for review.

Direct interaction with the auditee is lost during a remote audit. Sometimes the body language can give clear indications of something which is not right or is as it seems. Avoiding eye contact, adjusting seat, constantly restless are some of the indications can be observed more clearly during an in-person meeting and not via phone or video.

The remote audit is gaining traction and it is a positive thing. Clear and well-planned audit planning and communication are crucial to ensure a seamless process flow. While I do not envision that the industry will be 100 percent virtual, there is a scope for at least one-third of audit activity to be completed remotely. With ISO 19011:2018 – Guidelines for Auditing Management Systems including new specifications for conducting remote audits, it is obvious that we are moving towards a virtual auditing approach. However, the benefits of having a personal connection and interaction with auditees cannot be neglected.

Enroll in our remote work and audit related courses to learn more. Below are some top picks for you;

1. Conducting Remote Audits

2. The Future of Internal Audit

3. IT Security Issues When Working Remotely From Public Network Connections