Over the past year and a half, our lives and the internal audit industry as a whole have changed drastically. Many of our clients learned to adapt in ways they never thought possible. In 2020 and the first half of 2021, The Audit Library conducted all of our consulting engagements virtually with great success. So, where does this leave all of us going forward? Do we go back to our audit style of 2019 and complete everything in person, or do we adapt and change with the new skills and lessons we have learned as auditors over the past 18 months?
If you have read any of the blogs I have written in the past, you will know the answer I am going to offer… Adapt and change! It is the only way that we can move forward in the current environment and continue to add value to our organizations!
One of the most positive things to come out of the pandemic is that audit departments have found new ways to work, and adapted more quickly than we might under normal circumstances. This could positively impact our abysmally high turnover, and help many auditors attain work-life balance.
However, I also believe that regardless of technology, necessity, and changing attitudes, there will always be benefits of auditors and auditees being face to face. It is important to ask ourselves some key questions to determine if remote auditing is ideal in different work situations. What are some proven strategies to work remotely? When is remote working appropriate? And when is an in-person meeting the best option, despite all the obstacles in our way?
Remote Auditing Works!
When many of our clients began working remotely, the key question on most auditors’ minds was which projects on their annual audit plan could most easily be completed from afar. Some common examples we heard were projects that could be classified as consulting, such as legal function reviews, records retention audits, website compliance reviews, corporate culture audits, validating complex accounting models, etc.
Auditors can also use their time working remotely to complete critical tasks that are often neglected, such as creating or updating audit policies, procedures, charters, and job descriptions. A few more essential projects auditors can complete remotely include quality assurance self-assessments, quality assurance and improvement programs (QAIPs), and creating long-range strategic plans for their nternal Audit department.
Luckily, there is anecdotal information that creativity and innovation continue to expand in the internal audit community when working remotely. Many auditors have found that remote working is not only possible, but that auditors can add a lot of value and often work more efficiently.
Examples of Remote Auditing
Auditors whose companies have invested in laptops, electronic workpapers, and document imaging are at a clear advantage when working remotely. The more information auditors have at their fingertips, the more remote auditing is possible.
One of the most impressive examples of remote auditing I’ve heard is remote branch auditing. By utilizing FaceTime and security cameras, auditors I know were able to observe a branch’s controls, operations, and even count cash! I was really skeptical when I first heard about this, but upon reflection realized the surprise element of the branch audit is alive and well. It would be nearly impossible for a branch employee to perform a fraudulent cash count on camera. This approach allows auditors to spend less time on the road traveling from branch to branch, reducing costs in addition to limiting contact. While it may not be ideal to only perform branch audits remotely, going forward, it is worth considering some remote branch audits in your audit plan.
Another example of remote auditing is having auditees perform a full self-assessment prior to any audit work being performed. This is a new approach to auditing altogether. On the surface, auditors may be inclined to dismiss this method. However, when you delve further, the benefits become more apparent. Why not just come out and ask the auditees to assess their own work? While some people will not be objective, others will. This can help an auditor prioritize, figure out what problem areas deserve closer and in-person attention, and which tests can be performed safely from a distance. Always employ your professional skepticism when evaluating an auditee’s self-assessment, but allow the process to help guide your audit work.
The most common audit task that takes place virtually is meetings. In fact, most meetings are now taking place virtually. Technology solutions such as Zoom and WebEx have made this possible. However, the simple conference call shouldn’t be dismissed, as video conferencing fatigue may have a negative impact. These are all great options if you cannot have in-person committee meetings, or even board meetings, which have always presented a logistics challenge.
The Cons of Remote Auditing
I would be a hypocrite if I only discussed the cost savings and efficiencies of remote auditing. There are drawbacks as well; some obvious and some sneaky.
If you’re a regular reader of this blog, you know that Olivia and I are huge fans of auditors showing up. Recently on a virtual presentation call, we “preached” to a group of auditors about attending as many company events and functions as possible.
Unfortunately, auditors are often treated as outsiders. Auditors should always attend company parties, volunteer at sponsored charity events, and run or walk with your fellow workers in company-sponsored races. If you make your presence known, it is a lot harder for anyone to deny Internal Audit a seat at the table. This lesson applies to in person auditing as well. Sometimes you have to get in their face to be acknowledged!
One clear benefit of being in the room with your auditees is your heightened senses. Sometimes people say all the right words, but their ticks and general demeanor can give away that not everything is as it seems. Interview subjects who have something to hide often avoid eye contact, constantly fidget, adjust their seat and clothing, and otherwise show you that they are uncomfortable. While these things are not impossible to catch via phone or video, they are spotted more easily in person.
Another aspect of auditing is that, in a strange way, it can bring different parts of your company together. I can tell you from experience, and from talking with many of my peers, that the branch/corporate divide is real. If auditors stop going to branches altogether, it is just another way that the frontline team could observe they are treated differently from everyone else. Hopefully your company makes many efforts to help geographically remote workers feel included.
Do your part as Internal Audit in making all aspects of the company one team… Audited equally!
It’s About Balance
While remote auditing can and should be used in your department, our industry will never and should never be 100% virtual. The benefits of having personal contact and connections with auditees is simply too important. Consider going on a corporate “tour” and spending some of your time with the different teams and locations at your company. Talk with employees you haven’t seen in a while. Work somewhere else for a day or two, and I guarantee you’ll learn something new and interesting about your company and the people who keep your lights on!
Have you implemented remote auditing at your company? How did it go? What lessons did you learn? What will you keep when work restrictions are lifted? Leave a comment and tell us about it!