Jessica Moldovan
Jessica Moldovan
How To Undergo A Virtual Audit

How To Undergo A Virtual Audit

The world has changed since the COVID-19 Pandemic began. Many places of business have had to temporarily shut down, while others are adapting to working from home. It has changed how people communicate, how they conduct business, and even how they interact with co-workers, clients, and customers. As is the case with any sudden changes, there are challenges that are presented and with it, adjustments that need to be made. This could not be truer for accounting; especially auditing.

During an audit, an organization has its financial information thoroughly examined, usually by an independent party. The independent party, the auditors, need to obtain an understanding of the organization’s policies and procedures before being able to examine, test, or verify any financial information. Many organizations have had to implement changes to procedures and policies due to the pandemic and working from home. To ensure everyone is being safe and social distance, meetings with team members and clients are now held virtually, while most communication is done via e-mail, phone, and messaging. Thus, audits from both the auditor and the client’s perspective have changed drastically. Here are some tips for clients to help get through a virtual audit in a smooth and timely manner:

Communicate – Communicate regularly with your auditor about a good date and time for fieldwork. Although, for some clients there will be no actual fieldwork, where the auditor comes out to your place of business, there will be a designated time allotted for each client, which is fieldwork. Schedule a time to speak with the auditor about any changes that occurred during the year, especially changes to procedures that were implemented due to the pandemic/working from home. Provide the auditor with emails and phone numbers of other personnel who will be a part of the audit.

Prepare – Once the date for fieldwork is scheduled and the activities of the year to be audited have been discussed, including changes due to the pandemic, begin preparing for the audit by working through the Provided by Client (PBC) list. The PBC List is the list of documents requested by the auditor from the client to complete various testing and analysis of balance sheet and income statement accounts.

Accessibility – If the accounting system allows, provide auditors access to the system to retrieve financial reports or view invoices and receipts. This can greatly speed up the audit process by reducing lag time between emails. If part of the audit will be performed in person, provide auditors with any necessary access cards and badges for parking garages and/or buildings during fieldwork. Regardless of whether the audit is performed in person or virtually, ensure that the auditor is provided with the necessary documentation either electronically or paper copies.

Availability – The most important part of getting through a virtual audit is being available for the auditor during the scheduled fieldwork dates and times. Usually, the auditor’s main point of contact is a Chief Financial Officer (CFO) however, that is not the only person an auditor needs to speak with. If possible, try to have any personnel from HR, payroll, accounts receivable/payables, accountants, bookkeepers, or administrators for these departments available to answer any questions that may arise during the audit.

Regardless of the changes brought on by the pandemic, an audit can be performed virtually, thus ensuring everyone’s safety. The key points mentioned above are important for both the client and auditor. A client can expect the same key points to be observed by their auditor. An auditor should be 1) communicating as much, if not more, by providing regular updates of the status of the audit, 2) prepare before client calls and familiarize themselves with the client’s procedural changes prior to fieldwork 3) provide a client with accessibility by providing links to where files can be uploaded and by being reachable during the audit, 4) make themselves available to answer client questions and provide updates to auditing standards for their unique industry. By observing the above key points, it can be expected that a virtual audit can be as smooth and efficient as an in-person audit.

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