Auditing in remote work environment: CHALLENGES AND ITS SOLUTIONS

Introduction to remote auditing

Remote auditing is the method of auditing an auditee (client) by the auditor without being physically present in the client’s premises, but virtually through the help of many online tools such as Microsoft teams, Skype, to meet with the clients and other online tools such as zohobooks, sap and emails to share the client records which are required for auditing.

The rise of information technology paved way for remote audits to be successful. The importance of remote audits rose during the covid-19 pandemic while complying with the protocols. It emerged as a crucial tool by eliminating the need to be physically present in the client’s premises for inspections. It enables the business to maintain continuity in their operations.

Advantages of remote audit

Remote auditing emerges as a transformative solution revolutionizing traditional audit practices, in a period defined by digital connectivity. It gives a variety of benefits to businesses across various industries, some of which are as follows :

It helps the clients as well as the auditor to save time and resources and allocate the saved resources to other required areas.

Helps to improve the efficiency of the audit team.

Scheduling of the meetings with clients become more flexible.

Conducting of remote audit helps the client to meet the deadlines and statutory compliances on a timely basis.

Helps to conduct audit on geographically dispersed locations.
Reduces Audit Burnout

Process of remote auditing

Remote audit enables the auditors to examine processes, systems etc. remotely. It minimizes the need to be physically present for conducting an audit. Generally the process of remote audits are as follows :

Connecting with the client through online tools (Microsoft teams, Skype etc.) and understanding the requirements of the clients for the audit.
Determination of the required documents, timeline for the audit and the period for which audit is to be done and the selection of the audit team.
Requesting the client for access to accounting softwares and records and other credentials which are required for the audit.
Starting of audit by the audit team, arrival of conclusion after thorough analysis of accounting software, records and other documents.
On basis of the conclusion drawn above, the audit team may go to client’s premises for further clarifications.
Based on the conclusions reached and the clarifications received from the clients, the auditor proceeds to finalize the audit report on the client’s business.
Presentation of the finalized audit report and suggestions given by the auditor to the clients through online tools (Microsoft teams, Skype etc.), on an appointed date.

Challenges faced by the audit team while conducting remote audits

Even though remote audits offer many advantages in terms of safety and accessibility, it presents a series of difficulties which the audit team must face and overcome them while performing remote audit methodologies. Even though the reports prepared virtually or in-person may not differ significantly, there are some challenges while conducting a remote audit which include

Detailed observations are found to be lesser in remote audits as compared to physical audits
There may be certain situations which are not suitable to be audited virtually. Example- Stock audit
Reliance on slow/disruptive internet connections may impede communications and data transmissions.
Non- availability of required Information Technology (IT) infrastructure.
Conflicting time zones between auditors and clients
Sharing of confidential information across online tools may be subject to the risk of data leaks in the internet.
Improper maintenance and authenticity of records maintained by the client.
Difference in language and communication styles.
Resistance to change in technology by the auditors.
Improper adaption and training of staff to changes in technology.

Solutions offered by PKC to the challenges in remote auditing

Even though there are challenges in remote auditing, PKC offers a variety of solutions to overcome those challenges effectively. Some of those solutions are as follows :

Exhaustive analysis of client’s documents.
PKC assigns audit team members for situations not suitable to remote audit.
Establishment of stable internet connections inside the office.
PKC takes measures to stay ahead of changes in law, technology and business fronts.
PKC is flexible in meeting with the clients
PKC has systems in force to preserve client integrity
PKC helps the clients in maintaining the records as per statutory compliances.
PKC assigns suitable audit team members to overcome language and communication barriers
PKC is always open to changes in technology and finds ways to implement them in audit process.
PKC builds a place of exceptional talent, learning and success for all employees.

Conclusion

Whether physical audit or remote audit, hiring PKC may help the businesses in complying with statutory provisions, give insights to improve business operations and financial performance, cultivate stakeholder trust, building client capabilities for long-term success.