Virtual Audit in UAE – A New Trend
Today we will take look at how leading corporations around the world are levering the impact of the COVID-19 pandemic through virtual work by Auditors which is exactly what Dubai audit firms are doing in the UAE.
The year 2020 will go down in history as one of the most trying years of modern times. The pandemic tested nearly every country, business, and individual in ways that heavily impact daily life. This blog post will provide you all the information regarding how the Covid-19 impacted the ability of IT audit procedures and functions to execute as well as successfully deliver on their objectives and results that were expected from them.
Covid-19 has caused a situation in which it has become difficult for auditors to carry out traditional audit procedures and functions such as performing routine physical inspections. Further, it has become more challenging for auditors to obtain audit evidence through traditional means because conducting physical stock counts, obtaining original documents, and having access to conduct one-on-one interviews with the company’s staff has become more difficult than it was ever before mainly due to Covid-19 and the fact that many of the staff members of most companies are working from their homes. This may ultimately cause the audit firms to consider the impact of situations where they were not able to gather sufficient evidence (mainly due to the practices adopted by companies due to Covid-19) in their final audit reports in the form of maybe a modified opinion.
In order to compensate for the lack of physical presence at the company’s premises to properly collect and gather audit evidence, the auditor may opt for alternatives for collecting supporting evidence and forming an opinion on controls, including whether documentation and/ or inventory inspection can be observed on an alternate date if it is not possible to do the aforementioned tasks by year-end, with audit tests and procedures performed against intervening transactions. Use of technology that allows companies to remotely conduct a physical stock count via video feed or sharing documents through secure file-sharing technology such as Dropbox may be necessary if companies want their audits to be concluded on time without having to argue with their auditors regarding a disclaimer of opinion or maybe a difficult argument about materiality levels. More or less same is the case with outsourced accounting services where accountants cannot visit your office but at the same time, your books must remain in order. So, the use of technology is inevitable these days.
Now we will discuss some of the frequently asked questions regarding the impact of COVID-19 on the way in which an audit was traditionally conducted
Question 1: How the shift to work from home has impacted the auditors’ ability to plan audits, execute audits, hold meetings with stakeholders, draft report reviews or issue final audit reports, etc.?
Answer: This shift has forced auditors to become more mature in their adoption of Agile Audit techniques. An agile approach to audit can save time and reduce audit costs, while also improving the overall quality of audits. Other benefits associated with adopting an agile approach to audits include increased flexibility, iterative planning, increased communication, the ability to address emerging business issues and needs. The shift has made auditors to focus on what is actually necessary for meeting an audit’s objectives. For example, discussing an audit’s objectives either through an email or over a phone call and confirming any changes resulting from the discussion, only documenting the important points and using more informal communication to save time as well as using different techniques to communicate different issues based on the nature of the issues identified during audit verification and report drafting.
On the other side, sometimes, flexibility results in complacency that causes the tasks to be delayed to the last possible minute, so it’s very important for the audit team to have communication on regular basis and that too in a way that people can digest. It’s becoming difficult to gather information if you’re not working in the same manner in which your clients operate and work, therefore our department is moving towards a workflow-based system.
Question 2: How has working from home impacted the audit team’s morale or the quality of audit work the audit team is producing?
Answer: Given the time since the pandemic started and the uncertainty surrounding how long it will last, the morale of the audit team can generally be perceived to be lower at times. Usually, there is an increase and decrease in one’s morale, but this pandemic is generally causing the morale of people to decrease with every passing day, week, and month. However, everyone has a different situation, so it’s important to understand the needs of the audit team as well as the needs of the individuals that are part of the audit team. It’s a little bit more difficult to read one’s tone and body language over video and voice calls, but it’s a skill people learn with time and experience. Now, more than ever, it’s very important to have time in which audit team members connect with each other by discussing non-work-related topics, and this activity must be made part of the audit team’s workday. It can be helpful for the team to interact with each other either through messaging or by having one-on-one short meetings in order to keep the connection between all the team members strong.
While the quality of audit work that is being produced by different audit teams across the world has not changed much but sometimes it takes longer for audit teams to conclude audits during COVID times than expected. It’s easier for people to ignore requests for information when you cannot go to their desk. They can ignore voicemails, phone calls, emails, IMs, and requests for meeting until they are ready to provide the required information or to entertain a specific request for a meeting. An audit team is more likely to complete its tasks on time when the audit team is working in the exact same way the situation demands, therefore it is very important for auditors working from home to adopt agile auditing techniques and workflow applications.
Question 3: How working from home has impacted an audit team’s relationship with their audit clients?
Answer: In some respects, working from home has provided a unique bonding experience among the audit team and its clients. This unique bonding experience is due to the fact that we all are facing the pandemic and doing our level best to find creative solutions to address all the identified issues that work for both parties. The deadlines for different audit tasks still exist but audit teams in many situations aren’t able to communicate these deadlines immediately due to possible technical issues and other priorities. When you are not able to physically monitor a control operate as you were able to do in the past then it is important for all the parties involved in an audit to work together to find ways in which they are able to meet their respective goals on time.