How Do you Prepare For a Virtual Audit?

In these challenging economic times and with nothing but uncertainty on the horizon, it’s more important than ever that businesses keep on top of regulatory requirements and changing legislation, ensuring their audit goes ahead as usual. With social distancing measures and travel restrictions in place due to the COVID-19 pandemic, not to mention workplaces being physically closed in many cases, it’s likely that any imminent external audit is going to be conducted remotely. So, what does a virtual audit entail and how can organisations best prepare?

A virtual audit will ultimately perform the same function as a regular face-to-face visit, instead using a range of technology available to auditors to complete the financial picture. The video calls we’ve all become accustomed to; screen sharing; remote document access; and live streaming might all be used in a virtual audit to provide the auditor with the information needed. Understandably, this will be an unusual process for companies and so it’s important to prepare for your audit slightly differently and probably earlier than in previous years. Here are four areas we think should be top of the agenda in terms of preparation:

Technology

Before considering the tech involved in how the audit will proceed, assess the remote working capabilities of the key members of the finance team, in terms of security and access to data, so that there is no breakdown in information flow from critical staff.
Agree with the auditors the method for access and file sharing, such as a virtual audit room in the form of a secure cloud-based file sharing portal.
Make sure all parties have the remote access required and that security protocols are in place.

Timetable

The auditors will appreciate that these are exceptional circumstances and that your finance team headcount, working hours or workload may be different at the moment. However, it’s still important to agree a timetable in advance to meet the audit date.
Identify any other projects that can be deferred so that all key staff can be available for the audit.
The auditors will confirm the information and documentation that will be needed and request a sample selection. Review this as soon as possible to ensure the timetable stays on track.

Omissions

There may be documentation that isn’t readily available, for example, it may exist only in paper form at an office; may be with an employee who is on furlough; or may be unsigned. Flag these omissions as soon as possible with the auditor to agree an alternative solution.
If regular processes have been adapted for remote working that might affect the information produced, highlight these with the auditor, and agree anything that may need to be accessed at a later date if required.

People

Prepare a business continuity plan if you don’t already have one in place. Make sure that all key finance staff have a backup team member who can assume their role in case of sudden illness.
Check in on your team regularly – these are strange times and outside of the office people are working under varying conditions, which isn’t always easy.
Above all, communicate. This is often taken for granted when a finance team is in the same location, working together. Make time for frequent update calls and virtual meetings to keep everyone on the same page and working towards the same goal.

Has your organisation been through a virtual audit in 2020? How did your team react? We’d love to hear from you.