Finance Indaba panelists reveal the key to a successful virtual audit is communication
Panellists agree overcoming communication challenges is important during a virtual audit.
Investec Life’s financial year-end was just a couple of days after the national lockdown was announced. Fortunately, the team had already undergone an internal audit process on-site and the team was similar to the one from the year, so established relationships already existed.
Roxane Leita, Investec Life head of finance said:
“In terms of transitioning an on-site audit to a virtual one, we managed to do that seamlessly. We started looking at working off-site as early as the end of March with the connectivity and communication issues already sorted out.”
She added that supporting documentation is critical in an external audit, and fortunately most of their documentation was electronic. They also used the auditor’s portals to upload documentation, a system they’d had for a while, but which had been under-utilised.
Virtual audit challenges
Communication also posed a challenge. It is very easy to walk into an audit room and explain a concept, but doing so electronically was difficult. Some professionals found themselves having to explain a lot of concepts that they didn’t have to explain previously at a level that they weren’t used to.
Building relationships virtually was a tall order, Roxane said:
“The biggest challenge I found was establishing relationships virtually compared to face-to-face, and this does take a little longer.”
Not preparing is preparing to fail and Natalie Terblanche, director of audit technical and methodology at PwC believes in this strongly. “A successful virtual audit is all about preparation, which rests on the shoulders of the leadership of the organisation who must set the right tone around how queries will be responded to, when will they be responded to and in what manner,” she shared.
She added that when you’re not prepared and don’t know what to expect, it causes a lot of frustration, which can escalate to a point where client and auditor are not aligned.
In addition, PwC’s most significant challenge was trying to teach new graduates how to conduct an audit when they’d just left university, during a pandemic, especially when 80 percent of auditing is learned on the job and 20 percent from books.
Virtual audit demands
Moving to a virtual auditing process was a big change for the team at PwC, but luckily, they had the benefit of seeing what was happening globally and could design their own process accordingly. They relied on a three-pronged approach, which involved the following:
- Reaching out to staff and making sure that they were comfortable with what was about to happen, and making sure that they had somewhere to work from.
- Collaborating and communicating with clients and making sure that they understood the process.
- Using technology through VPN networks to allow them to work seamlessly.
The V&A Waterfront team were at an advantage because they’d started their IT journey quite early on. They’d revamped their system and purchased additional software. V&A Waterfront’s finance team started remote working as early as 2016, so through trial and error they’d already adapted to working from home before the pandemic hit.
For Narriman Taliep, former CFO of the V&A Waterfront, a virtual audit isn’t that different to an on-site one, you’re just using different platforms. “For me a virtual audit is exactly the same as an on-site audit, it’s just that the communication is done on an electronic backboard,” she said.
She added that strong communication was key to the audit process and they had to have a solid technical foundation to approach the audit. They also had to purchase additional 3G cards to get the connectivity going.