Accounting professionals have debated how or whether to do audit work remotely for years, but the COVID-19 pandemic has quickly accelerated the practice when travel and office work are suddenly become unfeasible for most. We spoke with the leaders of three small businesses about the lessons they learned as they increased remote audit work during the pandemic, including what they plan to continue or do differently as they advance.
Below are their tips, along with comments from Jennifer Wilson, co-founder and partner of ConvergenceCoaching LLC, who has long advised accounting firms to embrace remote auditing.
“A lot of audited assets are digital and they can access and assess [them] from anywhere,” Wilson said. “Remote auditing doesn’t mean 100% remote. This does not mean that there is no contact with the client or in-person meetings, but that most of the audit work must be done remotely. [physically] from the customer’s location.”
Wilson’s consulting firm conducted its last biennial Work anytime, anywhere survey in 2020 and revealed that 61% of the 223 accounting firms surveyed plan to do more than half of their audit work remotely in the future. This same question, asked before the pandemic, had only 17% of firms indicating that they would carry out the majority of their audit work outside of their clients’ premises.
Remote Audit Preference
Two small business owners have ventured into remote audit work, Zoe Davis, CPA, president of Davis & Company CPAs in Mount Pleasant, SC, and Adam King, CPA, founder and CEO of King Consulting Group in Raleigh, North Carolina.
This audit season, many Davis customers have indicated that they prefer remote audits. “We will plan our calendar year-ends on a case-by-case basis, based on customer feedback, but we expect 85% of our audits to be conducted remotely again this year,” Davis said.
King found that working remotely created more efficient experiences for staff and customers.
“It’s a different operating environment because audit teams don’t sit at their clients for months, which a lot of clients don’t like,” he said. “It’s a remote world, and I emphasize that our practice can be remote all the time but also be available for clients if they want us to be there.”
Building relationships during onsite audits can be more difficult when auditors do not interact with clients who are in a rush to find space for visiting auditors, or when fieldwork is condensed into one short period of time.
“Clients appreciate the time spent building the relationship and getting valuable insights from their listeners, but that usually doesn’t happen during fieldwork, which can be done more efficiently from the corporate office in very many cases,” Wilson said.
Having the ability to do parts or even all of an audit remotely can also help retain CPAs who may become overwhelmed with frequent travel over time, Wilson said.
“Auditing staff who have extensive travel or travel to clients become exhausted over time, especially when they start families, and that creates fragility for businesses,” Wilson said. The quality of audits will likely suffer more from staff turnover than from being done remotely, she suggested.
Off-site and on-site mixing
Although there were positive things learned at the start of the pandemic and some clients like remote audits, Lesley Kelly, CPA, partner at DarverKelly LLP in Greenville, SC, said she was determined not to be completely remote.
“Our firm is a collaborative, outgoing group, and because of our personalities, we’ve cultivated clients who want and value communications,” she said. “Audit is a two-way street, with auditors providing a resource to clients by sharing information, which happens more easily when we spend time together.”
However, she is considerate of her customers and staff and takes COVID-19 precautions to protect them if they visit.
King said he finds remote work cheaper for his clients and his company and provides his employees and contractors with a more flexible work environment.
Wilson, however, recommended keeping remote work pricing at the same level that in-person work would command, minus any applicable travel costs. Customer value and quality of work will be the same whether or not a CPA is at the customer’s facility, and it’s important that prices reflect that, she said.
Embrace technology and new work structures
Kelly and Davis noted that some audit requirements can be difficult to fit into a remote financial statement audit and cannot be sacrificed. Auditors should exercise their best judgment in these scenarios and ensure that the necessary or required procedures are properly performed.
Reviewing documentation, making inquiries of management, and observing customer activity are areas that can be difficult to do with Zoom, while observing real-time activity provides valuable insights, said Kelly.
“Our auditing standards must be met in these areas,” Kelly said. “It is important to discuss how this can be done when planning, as we may not be able to maintain a fully virtual audit from a work quality perspective.”
Some companies have taken a creative approach, Wilson said, using drones and other technology for inventory control. She suggested having a video kick-off meeting before the audit to explain to the client how the auditors will work, introduce any shared technology, and provide information on next steps and due dates. Some companies have even purchased technology for customers to make it easier to access video or scan paper documents.
If listeners are having trouble getting the data they need while remote, she suggests setting up an ongoing video meeting every day at the same time to draw attention to unresolved items or concerns. and keep customers focused on what’s needed next. This approach can also be used when managing a remote or distributed audit team, having daily progress checks and getting things done.
Davis’ company uses video chats, more emails and phone calls to gather information and does a lot of offsite work. Sometimes they need to schedule in-person visits, internal control discussions, or inventory viewing.
“Due to COVID, we have been more attentive to improving the customer experience, so we did more planning ahead and had a member of staff gather all our questions and send an email. -email to the client with a link to our platform,” she said. “We scheduled meetings for customers to answer questions, and they told us at release conferences that they were happy with how [the audits] went and found [them] less disturbing. »
Wilson is encouraged by how quickly companies moved to remote working when pandemic conditions demanded it. She predicts remote auditing is here to stay and encourages those who are still hesitant to talk to their peers about their experiences.
“Audits will increasingly be conducted remotely, and more strategic discussions and activities will take place with clients in person, outside of the audit cycle,” she said.
— Sarah Ovaska and Maria L. Murphy, CPA, are freelance writers based in North Carolina. To comment on this article, contact Courtney Vien at [email protected].