How Can Internal Auditors Successfully Work From Home During Covid-19 and Omicron?

As the world reels from a new COVID variant with festive plans put on hold and the threat of lockdowns, circuit-breakers, and social distancing in prospect, auditors are once again re-evaluating their value proposition.

In the UK, “Plan B” is underway to stop the spread of Omicron, and across Europe, the introduction of wider lockdowns in the Netherlands and more restrictions in France are indicative of yet another winter of disruption across the finance and auditing industry.

Although not entirely unexpected, and despite the enormous amount of preparation audit firms have done to protect themselves against sudden COVID-related changes, the pace at which Omicron has spread and the rapid shift of financial discourse from “mild caution” to “how long an inevitable lockdown could be”, has created a wave of uncertainty in the industry.

So, what sort of remote auditing best practice is relevant for the newly disrupted festive season, and what “plan B’s” do auditors need to have if they must return to doing remote audits soon?

With an increase in COVID-fatigue, a particularly virulent strain of coronavirus, and disagreement at state level on how best to respond, the auditing industry needs to cherry pick the best advice the industry has to offer on remote operations to make the best of a tough situation.

Thanks however to over 18 months of hybrid operation, there is a wealth of advice about how to effectively audit remotely.

Can you offer impartial judgement, remotely?

“Many aspects of (an) audit will be impacted by the Covid-19 pandemic, particularly those where sound professional judgment is needed. Our public health guidance has vastly improved in helping to deal with COVID since the report was first published, and vaccine uptake has spread, increasing confidence in face-to-face meetings and a return to some sort of normal.” This quote from the International Federation of Accountants is part of a wider section on Professional Judgement and Professional Scepticism, in their 2020 report “Summary of Covid-19 Audit Considerations”.

Likewise, the increase in digital tools and virtual platforms has increased confidence in the ability of auditors to remain abreast of issues. What hasn’t changed of course are the standards for professional and impartial judgements from auditors. How easy is it then for auditors to retain their impartiality when working remotely?

Navigating our changing financial world needs to be done from a basis of agility and reactivity, and the material misstatement of accounts and/or data can be more frequent because of COVID-19. Simply put, mistakes can and do happen, will continue to happen, and may happen more even with the positive adjustments made to factor in remote auditing.

The fix? Ample risk assessment: the development of cultures of contingencies to factor in longer auditing processes; re-assessments of appropriateness, adjusting events, and disclosure of risk or statements outside of financial concerns; and an honest factoring in of limits to auditing scope.

Digital transformation and the power of preparation

Deloitte’s COVID handbook titled “What COVID-19 has revealed about remote auditing” highlights two of their most important points in managing an effective audit process remotely: “Remote working tends to challenge long-held perceptions about what it takes to be productive, valuable, and inclusive. Organisations can ease the transition by emphasising the following: Respect boundaries, words matter, and promote well-being” and the importance of “…effective and well-practiced project management, processes, and technology capabilities”.

Deloitte discusses the importance of the digital/physical realms intersecting, and how digital elements of auditing should never supplant human qualities of the auditor, teams, and client relationships.

Digital solutions such as using the Cloud or incorporating more agile workflows should only be done if the results bear fruit and help the remote process: “The results can help reduce the burden on team members and requires fewer asks of others to get the job done”. Efficiency first, but not if it compromises service.

Revisit the audit toolbox

Deloitte mention revisiting your digital toolbox to make sure you’re prepared for a disrupted 2022 and that your processes are still fit for purpose; “As many organisations discovered, technology isn’t just about providing the infrastructure for remote work. It is really about enabling the very future of work itself”. Calling it a “digital reviewer” – a mindset of improvement across the board, from “architecture, security, strict rules for consistency, and planned use cases”, to guarantee the most effective use of time, labour, and money.

Deloitte also suggest building a “playbook for professionals to conduct remote work, reminders of functionality, good cyber practices, and tools to be effective and safe”. This means focusing on the holistic elements of team management within auditing – mental health, safe working environments and positive working cultures – as much as the tools, skill sets and experience of auditing directly.

For more information on remote auditing, the Institute of Chartered Accountants in England and Wales have put together a helpful FAQ on remote auditing here, and the International Federation of Accountants have also published advice on remote auditing here.

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Photo by Yoav Aziz on Unsplash

21-12-2021

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