I’ve been an auditor for many years, and can report that travel is a major concern in this industry. Auditors want to spend less time on the road, and prefer to sleep in their own beds. Companies want to save money on mileage reimbursements, airfare, meals, and lodging. And during the apex of the pandemic, everyone wanted to stay as far away from everyone else as possible!
Remote auditing procedures have always been tossed around as possibilities to get around these issues. The pandemic served to push us all to reconsider the need to be in person, and to creatively search for new ways to audit effectively. Teleconferences, Zoom, and FaceTime have made remote auditing more accessible to more professionals than ever.
When the industry started accepting remote auditing at scale in 2020, The Audit Library made changes in response. We started giving presentations and performing training virtually when in-person events and conferences were cancelled. John wrote a blog about his prediction that remote auditing was not a passing fad called Remote Auditing is Here to Stay. We also added new content, and considered existing content in this changing environment.
What About Branches?
Just as John predicted, the conversation about remote auditing hasn’t stopped. In fact, we’ve observed more auditors considering remote auditing than ever. Our friends in the financial services industry are even performing their branch audits remotely. At first that seemed impossible, but creative auditors have found ways to make it work.
In response to subscriber feedback, we added a Remote Branch Audit Program for banks and credit unions to the Library. This program walks auditors through modifications that can be made to perform the entire branch audit suite remotely, without sacrificing effectiveness. Get more audit coverage over your branch network without leaving the comfort of your office, all while saving your company money. Sounds like a win win!
We wanted to know how real auditors in the field are auditing branches remotely, so we put the word out via LinkedIn and our newsletter, and asked our subscribers for advice. Many of you responded, and validated our impression that the industry is becoming more remote. Three responses really stuck out in their detailed and unique approaches.
The Hybrid Approach
Miriam Neal is the Internal Audit Manager at the Credit Union of Southern California, and our subscriber and colleague. Miriam recommends a hybrid approach to branch audits, by performing the maximum number of procedures via the video security stream, FaceTime, Zoom, Microsoft Teams, or telephone. “We have been having hybrid remote branch audits for quite some time. Most of the documentation we audit is digitized and can be reviewed remotely.” Consider what branch documentation review can be performed remotely at your organization. The availability of digitized documentation opens up a world of possibilities.
She continued, “we can access the cameras at the branch, both live and historical to observe many of the dual control processes. Most of the remote work is completed before the ‘surprise’ field day.” She explained that “the on-site visit consists of cash counts, reviewing the signage, looking at daily work, observing safety and flow of the branch and interviewing.”
The hybrid approach extends to audits other than branches. “Most of our other audits are done 90-95% remotely. Our ‘back office’ team members are on a hybrid schedule of three days home and two days in the office, so their interviews usually end up being on Zoom or Teams.”
By building flexibility into auditing procedures, the hybrid approach at this credit union benefits both the auditor and the auditee.
The 100% Remote Approach
Another colleague in our network developed a unique approach in response to Covid-19, which had a lasting impact. Angie Garman is the SVP of Audit and Risk Management at First Florida Credit Union. She explained “branch audits were always a surprise audit prior to the pandemic. The plan that I devised was to make arrangements with the EVP of Operations and make sure the branch manager was going to be onsite for the day I selected to perform the remote branch audit. I called the branch manager the day before the audit and informed him that I would be performing a remote branch audit starting the following morning. This was not a surprise completely, but we also didn’t provide weeks of notice. We then made the plan that when he arrived at the branch, he would FaceTime me from the parking lot and I would “walk around” the branch with him just as if I was onsite.”
The result? “It worked out fine, and it was much better than I had anticipated. The phone has to have a full charge because we were on for several hours. The branch manager also needed someone to assist him during certain steps when he needed both hands. If we were looking at the instant issue log, for example, he needed someone to hold the phone while he opened the binder.”
Angie also advised selecting a branch manager she already knew and trusted for her first audit, as she was developing her remote audit work steps in real time. Once she realized how easy and effective remote auditing was, it was utilized often.
The Full Coverage Approach
We originally thought of remote branch auditing as a compromise, but one auditor showed us that going remote can lead to increased audit coverage. Laura DeVoe is the Internal Auditor at Azura Credit Union, and decided to use remote auditing to her advantage. “Most of the audit hours happen prior to the on-site visit. Then the on-site is reduced to one day.”
Similar to the hybrid approach, Laura reviews scanned and digitized documentation remotely. “I complete as much as possible before the on-site visit, compiling a list of things to follow up on when on-site.” Laura also observes staff procedures, controls, and behavior over several days by using security technology. “I’ve found that with a lot of things I get a better idea from reviewing camera for several days vs. watching the task once when they know they are being audited. For example, covering codes, maintaining dual control, locking computer/drawer when stepping away, etc.” We were blown away by how simple but powerful this approach is.
As for Laura’s day on site, “On-site I observe opening safety procedures, perform cash counts, review selected daily bundles (these aren’t uploaded), look at branch security, inspect the grounds, interview employees, look for member info that isn’t secure, etc.”
This sounded like a lot of work! “For better or worse, I budget 88 hours per branch audit. 80 are away from the branch and eight are at the branch.” We typically recommend a 40–45-hour budget for a more traditional branch audit, but encourage readers to try the full coverage approach once or twice and see what you can learn.
Conclusion
Remote branch auditing offers an efficient and effective way to ensure compliance with relevant laws, regulations, and internal policies.
