Kreston Global: Remote Accounting And Audit In 2022
August 4, 2022
via Kreston Global
Now we’ve been living with remote work for around two years, let’s look back on how remote accounting and audit have changed the profession.
In this blog, we’ll look at innovations in remote audit, what technology people are really using and share some exclusive thoughts from auditors on audit practice in 2022.
The technology was already in place
Much of the technology that facilitates remote accountancy and audit has been around since well before the pandemic. But just like in other sectors, it was lockdowns and social distancing which fast-tracked their use.
From an accounting perspective, for many years cloud software has been a game-changer in how it has enabled information to be shared and tasks to be performed from any location with Internet access.
It’s also helpful for audit, where it promotes good and well-ordered record-keeping and automates many reports.
Two other technologies which facilitate remote audit are Microsoft Teams and DocuSign. Like cloud accounting software, they are not new. In fact, we can look back over the last couple of decades and see how technology has continuously benefited the audit process.
For instance, a while ago there was a shift away from paper. And more recently we are seeing technology impact communications and data analytics in a positive way.
Continued development of specialist audit software and AI analysis are two areas where we can see gains now and in the coming years, as Theo Theodoulou, chairman of the Kreston Global Audit Group, explains:
“In terms of the audit software, we use CCH Audit Automation by Wolters Kluwer and a customized audit methodology from our audit team.
“The software provides a complete solution in audit planning, assisting us in correctly assessing the audit risk and planning the audit approach for the fieldwork and completion of the audit. CCH provides automation in key parts of the audit such as materiality calculations and sample size calculations.
“We are also keen to investigate the use of AI in substantive testing. However, we are still at the preliminary stages.”
How remote audit can make improvements on physical audits
Let’s look at how remote audit can improve on the more traditional audit process.
Taking Microsoft Teams as an example, one auditor described to us how the internal control walkthroughs are more effective in a Teams meeting than if they had four or five engagement members huddled around a senior accountant’s computer in person.
A Teams meeting makes it easier to see and analyze the data in real-time rather than getting printed information to interpret after the fact.
Notwithstanding the enhanced experience, companies also benefit from a reduction in travel and other logistical costs by not needing to put boots on the ground, so to speak.
This gives auditors the opportunity to add more value during the time saved, such as by reviewing files to work out which audit trails to prioritize and writing better quality audit reports.
There are still limitations though, as Dev Pydannah, managing partner at Kreston Mozambique highlights:
“Some clients are now being served remotely with a few procedures requiring us to be at the client premises, e.g. stock counts, physical verification of assets, employees etc.
“For some cross-border works, where we can’t travel due to border restrictions, we have to outsource to local auditors to perform procedures that we cannot carry out remotely.
“Where we cannot observe controls at the planning stage we need to increase sample sizes for further substantive testing and design additional procedures.”
When remote audit may still not be the right option
There will be times and places when a remote audit will not be best: for example, in a company with a physical work environment like a factory floor.
It may not be appropriate, also, for a client undergoing its first audit, as Christine McAlarney, managing director and shareholder at CBIZ, observes:
“We have been performing one of our largest public company audits entirely remotely since the pandemic began. For this to be effective, the engagement team must be comfortable with the existence of the business and related locations.
“Careful consideration would be needed to perform a remote audit for a first-year client.”
Introducing remote audit and accounting
If you would like to explore how you can better utilize technology to benefit from remote audit and accounting, please get in touch.
Theo Theodoulou, Kreston ITH
Christine McAlarney, CBIZ
Dev Pydannah, Kreston Mozambique
KRESTON PR, LLC
1509 FD Roosevelt Avenue Suite 303 / Guaynabo, PR 00968-2612
PO Box 193488 / San Juan, PR 00919-3488
Tel. (787) 646-4611 / Fax (787) 764-8688 Web: www.krestonpr.com / www.kreston.com
Email Taxes: email@example.com
IMPORTANT DISCLAIMER: This bulletin and its content do not constitute advice. It is intended for information purposes only and should not be regarded as specific advice. Accordingly, no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors and ensuring that such advice specifically relates to their particular circumstances.
At KRESTON PR, LLC we are ready to assist you if needs any help. Contact us for additional information.
“People do business, with people they know, like and trust”