The accounting profession is offering a lot of evidence and opinions on why remote audits are here to stay. As an audit partner in California, I have definitely seen firsthand that securely transferred documents can allow audit teams to successfully perform audits remotely.
Videoconferencing technology can also handle remote audit planning and presentations on any audit findings.
The pros for remote audits?
- Efficient timelines and procedures;
- Fewer travel and administrative costs; and,
- Less disruption for clients.
These same advantages prompted firms in Europe and Asia to develop remote practices that serve their clients in other time zones. Fully remote services were happening there long before the pandemic accelerated the need for it in North America.
But audits are a bit different than remote accounting or tax preparation.
There are clear disadvantages to the fully remote audit practice model that I have discovered over the past two years. These disadvantages are impactful for clients as much as they are for audit teams. I have worked on field visits for many years as well as on remote audits, and here is what I dislike the most about remote audits:
- The inability to pick up client social cues on a video conference call;
- The lack of context with client office culture; and,
- Less development of client relationships.
Remote audits simply do not provide the same personal experience with client relationships as in-person audits can. During planning meetings and audit presentations, human connections are muted by technology. Camera angles, varying volume and a person’s physical distance from the screen can make it difficult to read facial expressions. It is harder for the auditor to pick up on discomfort or unanswered questions.
Traditional on-site audits offered advantages for observing team culture. Do team members get along? What is their technology set-up? Do they appear confident in performing their jobs correctly?
In my experience with field audits, clients were also more comfortable asking questions and trusting the audit team to point them in the right direction. A welcoming smile from your auditor goes a long way toward building the relationship and hearing from the client more often during the year.
Will client risks increase through remote audits?
When clients ask questions, they gain a greater understanding of regulations and processes. This helps them to improve the organization and better manage their risk. Strict reliance on remote audits may not create the same conditions for trust and outreach to the audit team, particularly for CFOs, finance directors and controllers who are new to a role. Some may only hear from their auditors once a year.
What about the impact of remote audits on practicing our professional skepticism? The audit team’s mere physical presence at the client’s offices has historically reinforced to staff the importance of organization, compliance and doing the right things. Anticipation of that field visit encouraged them to get the accounting department shipshape. And it was impossible to hide facial expressions behind a darkened video screen.
It remains to be seen if remote audits will create more risk. Regardless, I think audit professionals need to stay connected and alert during and after the audit. We can certainly perform remote audits, but we cannot be distant in our approach to client relationships.
Make time to visit and connect
Remote audits may be here to stay, but auditors should be trained like other advisors to connect with clients more regularly during the audit and throughout the year. The client relationships are my favorite part of being an auditor. We are independent risk assessors, but we are also human beings. Just as we’ve realized that remote employees want to stay connected to the team, the occasional in-person client meeting (or phone call check-ins) can really enhance our business relationships and career fulfillment.
Recently, I was invited back to a client’s offices to conduct a training session. After more than two years of doing remote training, I could feel the positive energy in the room as people interacted and discussed my recommendations. Afterward, we enjoyed lunch together, which strengthened our relationships even more. It is my hope that the client will feel comfortable reaching out after meeting me.
Our firm now has employees in different states. We understand the value of attracting top talent no matter where they live, but we also plan to invite all team members to an annual meeting in California. Audit clients could be treated to the same opportunities through training, networking with each other as part of a virtual event, and finding ways to visit at in-person conferences.
In these ways, we can perform remote audits while remaining close and accessible to them.
