The concept of remote auditing has been around since I began my career at Withum over 12 years ago. I work for a firm that adopts and embraces all the tools and capabilities to execute such a task: software to directly extract data from a computer system; data analytics tools; Box to securely and transparently transfer files; email (obviously); Skype; smart phones; electronic document management systems; access to confirmation.com and lots of tech savvy employees. But with all that, we don’t audit 100 percent of our clients remotely. Why?

Not All or Nothing

I have tried both on-site auditing and remote auditing, and the reason I feel remote auditing hasn’t caught on fully is the same reason why blockchain will take time to implement in the accounting industry: both parties to every transaction need to use the same technology and operate under a mutual mindset. A substantial portion of the audit can be done remotely while preserving the same level of world-class client service as an on-site audit. However, I don’t believe 100 percent of an audit should be remote. After all, we are in the client service indus­try, and a good conversation over some Italian food never hurt anyone!

Pros and Cons

Let’s say you’re comfortable with the concept of conducting your audit 100 percent remotely and your client is too. Before you take the leap, here ae some pros and cons for your consideration.

Pros: 

• Remote auditing significantly increases quality of life because it allows you to work from anywhere. This also increases efficiency and effectiveness because, let’s be honest, we want to remove the sport coat covering our pajamas at some point during the day!
• Who wants an auditor in their building taking up valuable conference room space? It creates tension and uneasiness. Performing an audit remotely relieves some of that tension because the client’s staff may not feel their privacy is being invaded.
• You will never be told that a step ladder and a one-foot fold out tray is the only viable workspace again (unless your spouse is mad at you).
• I have seen staff in a conference room located next to a client’s office send an email to the client with a laundry list of questions. Why do I need to drive two hours each way from my home to do that?
• Remote auditing creates more focus and transparency, especially when using specialized tools such as Box, Microsoft Teams and others to aid in the process. Having a face-to-face request is different than an email in a variety of ways.
• You are not wasting anyone’s time — and time is not wasted sitting around waiting. When you have a meeting that is required or a complex issue requiring attention, a face-to-face meeting can be arranged and the time will be well spent.

Cons:

• As a certified fraud examiner and socialite, I appreciate being at a client site to understand the environment and get to know the people.

• Seeing people’s reactions to questions and dialogue provides valuable information to aid in performing an audit.
• Have you ever been on a Skype call where you know people are distracted? It can be annoying and unproduc­tive. In-person meetings tend to aid in being “in the moment.”
• Remote auditing requires the client to appreciate the use of technology and encourages them to desire a change in their habits (some are more apt to change than others). However, even though you often try to do as much work as possible remotely, there are al­ways some clients who are non-respon­sive when you’re not in their office.
• Technology systems need to be upgraded across industries to capture more data electronically.When clients have stacks and stacks of paper invoices and paper as supporting documentation, they’re required to scan each request into a PDF file or other electronic format and transfer those documents electronically which can be a burden and an unwanted nuisance to some.
• I enjoy being around people and working with clients to find mutual solutions. I don’t receive the same satisfaction performing an audit remotely that I do working side-by-side with a client. The same holds true with staff. In a true remote environment, our teams are not always in the same place. This creates difficulty in establishing a bond which is easier when everyone is in the same location.

Yay or Nay

Overall, I advocate for remote auditing to be able to automate the boring stuff (manual tasks) and reserve the face time for value-added activities and resolving difficult situations. Ticking and tying as well as verification of client data to third parties involves the auditor and a third party, not necessarily a client, therefore that can be done anywhere. As a profession we are moving in this direction, and as more clients adopt and embrace technology, I strongly feel we will see positive change which will translate to a higher quality of life with the same audit quality we always provided. And for all the naysayers out there who made it to the end of this article (namely partners, but I’m one of them so I guess I buck the trend like millennials seem to do and specifically called out the fact that I’m different), I leave you with one tip: ask your client how they feel about it before writing it off!

 

Author : Brad Caruso, CPA, CFE, is a partner at WithumSmith+Brown. He is a member of Withum's Not-for-Profit and Education Services Group, and he is a leader in the firm's audit process and central analytics teams. He is a member of the NJCPA.

Date of Input: 21/03/2019 | Updated: 17/04/2019 | nurmiera