Many of us have earned our stripes as accountants by working in public accounting or external audit. And we can confidently say that the year-end audit is a painful ordeal.
For accountants and auditors alike, it can mean weeks or months of digging up information from different applications, shared drives, spreadsheets, and even paper binders across multiple locations and time zones. It can involve endless back-and-forth communication over email, during onsite meetings, and on conference calls.
You can chip away at the PBC list and required testing, but discrepancies trigger even more sampling and additional testing—increasing rework and anxiety over a potential material error. And now, with the current impact of coronavirus, the audit just got harder.
Traditional audit processes are just not possible anymore.
According to a Wall Street Journal article, certain elements of the audit, such as physical inventory counts and access to data, and assessing complex, technical accounting issues or red flags have become more difficult—if not entirely impossible.
With many offices, warehouses, and factories closed, auditors are rapidly trying to figure out how to perform inventory checks before the end of the 12/31 fiscal year. Some are relying on phone and video calls, while others are using earlier inventory levels to estimate year-end balances or deferring taking stock.
For organizations using paper records, auditors are scrambling to figure out how to scan and electronically receive required documents.
Additionally, virtual meetings are hindering understanding and communication around sensitive topics that are better accomplished in person.
Although many aspects of the industry’s first-ever remote audit season remain uncertain, the AICPA remains confident that audit standards will remain comprehensive. Fortunately, there is a set of quick wins that organizations can adopt to ensure audits run as smoothly as possible in this “new normal.”
Here are five keys to running virtual audits more efficiently.
Manage PBC Lists Easily & Efficiently
Accounting and audit teams should move toward managing PBC lists in one platform to reduce back-and-forth communication, process confusion, and version control issues.
The first step is getting all close tasks, control documentation, audit requests, and work papers off your hard drive and into the cloud. This ensures that everyone has secured access to all necessary information and is working from one system of the truth.
Communication with auditors was already a challenge prior to this new normal, so being able to communicate regularly and assigning clear ownership over tasks and deliverables is key. With cloud financial close technology, Accounting can set auditors up with read-only access to completed close tasks and reconciliations, policies and procedures, and other necessary control information.
Instead of relying on manual spreadsheet trackers, phone conversations, and meeting notes, accounting and audit can collaborate directly in the system to promote consistency, transparency, and accuracy.
Drive Accountability Through Visibility
Holding your team and your auditors accountable for various tasks is critical during an audit. By getting all of your data, work activity, and communication in the cloud, you can easily set up reports and dashboards to track the status of audit work by owner and due date, and proactively identify bottlenecks.
Ensure Quality with Best Practices
Look to the experienced leader in cloud financial close technology for a library of best practices for performing the audit remotely. Leading practices include standardizing policies and procedures on the face of a reconciliation or close task to eliminate extraneous PBC items.
Solutions like BlackLine also come with embedded controls, like segregation of duties and an automatically documented audit trail.
Centralize Supporting Details
With a remote working environment, tracking down supporting documentation is even more difficult than ever before—especially if information is managed manually and distributed among isolated team members. In the absence of in-person collaboration, you can use technology to effortlessly consolidate and package all supporting detail and comments that auditors require.
This promotes an auditor self-service model that saves both teams time and reduces the chances that something might get missed.
Watch this webinar for a more in-depth discussion of these unprecedented challenges, and a guide to executing a successful remote audit.