Remote Auditing and the Virtual Workforce

Remote Auditing and the Virtual Workforce

The growth of virtual work has changed the nature of business, and internal audit is not immune to these changes. With the coronavirus pandemic and the prevalence of outsourcing and other remote working practices, it is increasingly essential for internal auditors to develop effective ways of evaluating virtual workforces. Remote auditing comes with several issues. These include the quality of the audit, security of the data, and regulatory compliance. According to Charles (2014), internal auditors must ensure they use technology solutions to conduct remote audits as they work towards overcoming risks arising from virtual workplaces. This article aims to discuss the effect of remote work on internal audits and offer insights on how auditors can effectively work through the issues of remote auditing.

The Impact of Remote Work on Internal Audit

The COVID-19 pandemic dramatically altered the trends of internal audits by moving most of the working processes remotely. In the past, auditors used onsite contact, visits, and access to records and other tangible assets to complete the audit. However, due to changes in employment policies, where employees are recommended to work from home, auditors have been forced to look for new strategies by which they will be able to access information, engage stakeholders, and perform audit procedures. Farcane et al. (2023) highlight that adopting remote auditing has benefits and challenges.

Lois et al. (2020) mention that remote auditing has strengths and weaknesses. The first is flexibility, which is considered to be one of the significant benefits of remote work. It also means that auditors can now conduct audits remotely, which results in a decrease in audit travels and an increase in audit frequencies. In the same respect, remote auditing can also enable companies to avoid incurring costs in traveling and accommodation expenses. However, going virtual has risks, particularly in the conduct and composition of audits and the availability of information and documents to the auditors.

Leveraging Technology Solutions for Remote Auditing

Remote auditing can only be made practical with the help of technology. Electronic means of communication, central web-based audits, and encrypted means of sharing documents provide auditors with various details and allow them to interact with the stakeholders physically. According to Jin et al. (2022), internal auditors must also have adequate knowledge of these technology solutions to enable them to carry out remote audits.

The most effective and frequently used tool in distant auditing is the application for cloud audit. It provides auditors with real-time data, risk assessment, other related information, and remote audit documentation. Other advantages include information sharing, where through cloud-based systems, auditors can work with other team associates and stakeholders irrespective of their geographical location (Farcane et al., 2023). In the same regard, secure file-sharing solutions guarantee that the appropriate documentation is available to auditors while at the same time preserving information security and sensitivity.

Virtual communication channels like video conferencing and instant messaging are also necessary in remote audits. These tools enable the auditors to conduct interviews and meetings and communicate with other stakeholders in their entities in real-time (Lois et al., 2020). However, auditors should ensure that these tools align with the organization's data privacy and security guidelines, especially when discussing sensitive information.

Maintaining Audit Quality in a Remote Environment

The most discussed issue of remote auditing is how to retain audit quality. One limitation is that auditors do not physically interact with employees or physical documents, thus finding it difficult to obtain the necessary information or even to verify audit evidence. Charles (2014) also stresses the need to develop new audit procedures and methodological approaches compatible with remote work conditions.

Internal auditors must depend on data analytics and digital evidence to sustain audit quality. Auditors can understand business operations and likely risks by analyzing electronic records, transaction data, and system logs (Farcane et al., 2023). Auditors should also arrange to follow up with different stakeholders more frequently after the remote audit to check on any issues.

Also, auditors are supposed to meet the requirements of audit standards and guidelines to conduct remote audit procedures. This entails recording all the procedures followed in collecting audit evidence, the tools and technology used, and measures for data security (Nugrahanti, 2023). According to the mentioned guidelines, auditors can sustain the reliability of audits when working virtually.

Challenges of Remote Auditing

Even though remote auditing is convenient and less expensive, it has several drawbacks. One of these challenges concerns data security and confidentiality, as maintaining privacy for the data being processed is often vital. The fact that auditors will be working from different places makes it very easy for the network to be compromised and sensitive information accessed by the wrong persons. Lois et al. (2020). state that internal auditors should consult the organization's IT and cybersecurity departments to conduct all remote audits securely.

Another possible concern is the reduction in collaboration and communication within an organization. Auditors may feel more challenged to cultivate trust with stakeholders and gather information for their audit since they cannot meet them face to face (Nugrahanti, 2023). In response to this challenge, auditors should be more assertive and engage the stakeholders virtually to keep them updated.

Adapting to the Future of Work

As with increased flexibility of working arrangements, there are requisite conditions that internal audit functions also have to satisfy. Jin et al. (2022) point out that the reason is that auditors should learn how to adapt to and accept the use of new tools and techniques and the idea of remote audit. This also entails the acquisition of new skills in areas that include data analysis, computer investigations, and working remotely. In addition, auditors must also continue to stay updated on other risks associated with new kinds of working from home, such as compliance risks and cybersecurity risks.

Internal auditors should also engage with senior management to determine compliance with the organization's remote work policies and overall risk management guidelines. These areas include evaluating work from remote control measures, compliance with data privacy laws, and evaluation of business influences caused by remote work.

Conclusion

Technological advancement has shifted how internal audits are carried out, primarily due to the increased adoption of remote work. Studies have revealed that internal auditors require information technology to conduct remote audits using cloud-based audit solutions and virtual communication tools. As mentioned above, remote auditing provides more opportunities and saves money, but it also includes some problems concerning data security and audit quality problems. Internal auditors should be able to update their audit procedures, keep abreast with other risks, and communicate effectively with different organizational stakeholders to overcome the barriers; hence, engage in remote auditing to ensure that the organizations are safe and comply with laws enacted in the virtual workplace.

References

Charles, S. (2014). Charles Financial Strategies LLC. Charles Financial Strategies LLC. https://www.charlesfs.com/fractional-audit-services

Farcane, N., Bunget, O. C., Blidisel, R., Dumitrescu, A. C., Deliu, D., Bogdan, O., & Burca, V. (2023). Auditors’ perceptions on work adaptability in remote audit: a COVID-19 perspective. Economic Research-Ekonomska Istraživanja, 36(1), 422-459. https://hrcak.srce.hr/file/437929

Lois, P., Drogalas, G., Karagiorgos, A., & Tsikalakis, K. (2020). Internal audits in the digital era: opportunities risks and challenges. EuroMed Journal of Business, 15(2), 205-217. https://www.emerald.com/insight/content/doi/10.1108/EMJB-07-2019-0097/full/html

Jin, Y., Tian, G., Wu, D., & Xin, X. (2022). Remote auditing and audit quality: Evidence from the field. Available at SSRN 4076612. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4076612

Nugrahanti, T. P., & Pratiwi, A. S. (2023). The Remote Auditing and Information Technology. Journal of Accounting and Business Education, 8(1), 15-39. http://dx.doi.org/10.26675/jabe.v8i1.37369