When grinding through busy times, it’s easy to fall back into comfortable work patterns to “just get the work out the door,” as opposed to adopting and working through transformative changes that will make your practice more effective in the long run. But it’s time to step back, re-evaluate and re-invigorate your audit and assurance processes and go beyond the application implementation and training that most firms focus on during quieter seasons.
In this post, we’ve targeted nine areas to help tune up your audit and assurance services. Keep these considerations top of mind so that you and your team will be ready to start improving when the next lull comes around.
One of the continuing remnants of COVID-19 will be the acceptance of remote audit work. Stay-at-home orders forced nonessential businesses to have employees work from home. This remote work environment pointed out that an entire engagement team doesn’t need to be at the client’s site every day in order to complete work successfully. Only those individuals who are assigned tasks better performed in person, such as physical inventories, need to be scheduled onsite. Microsoft Teams or Zoom calls should be set up daily, weekly, or biweekly, as appropriate, and at key points during the engagement with appropriate team members to monitor progress and discuss issues.
Audit progress often suffers when key people aren’t available to respond to or approve information. Prescheduling Microsoft Teams/Zoom meetings as part of the planning process help eliminate time conflicts and allow onsite and remote personnel to work collaboratively. All members should be fluent in sharing screens, real-time editing, and inviting clients and other firm members to participate on the fly.
“If you don’t have time to do it right the first time, when will you have time?”
Unfortunately, this is the reality for many assurance practices during busy times and one of the reasons that audits have inefficiencies. A lack of comprehensive planning involving all team members and the client leads to falling back to “same as last year” thinking, usually resulting in over-auditing in noncritical areas. Formalize the audit planning process to ensure all team members are present (physically or virtually), understand the scope and risks inherent in the engagement, and their roles in getting the work done. Start each engagement by targeting the most difficult, complex items first (to ensure thorough coverage) and leave the easier, more transactional items for later. To help formalize the process, do some of the planning for similar engagements concurrently. This workflow leverages firm expertise and expands auditor knowledge within targeted niches.
Get my entire list of debrief and planning session best practices.
Too often, firms schedule engagements back-to-back only to find one setback cascades into an ongoing string of impacted engagements, late nights, and long weekends spent trying to recover. Proactively scheduling down days strategically interspersed between engagements allows for proper wrap-ups and preparation for future engagements as well as reduces auditor burnout.
Clients not being prepared is one of the most cited reasons for audit schedules falling behind. Client meetings should discuss the agreed-upon listing of files to be provided by the client, including backups of entire accounting databases to be used for data extraction and analysis. There should also be agreement on the method of delivery (portal), and the specific date the firm must have possession to begin the engagement (i.e. one week before commencement). Firms should utilize a workflow tool or portal with workflow capabilities to appraise the auditors and clients of their status in meeting deadlines and use automated reminders to keep the client on track.
Are clients really aware of the consequences when they aren’t ready? Audit team members should participate in client planning calls to introduce themselves and ensure the client is aware of the consequences if they don’t meet their obligation to be ready. Clients must be made aware that if they don’t meet their due dates they will be responsible for the delay in the start of the engagement and the resulting delay in the delivery of the financial report. If there is additional work required beyond the scope of the engagement letter, the client must acknowledge that they are responsible for paying for this additional work with a change order.
Many conferences and A&A meetings allow team members to get an update about their firm’s key applications, (including audit work program automation, modern portals, electronic signature, data extraction and analysis) and pilot potential solutions. Firms should proactively expand training to include written and video documentation to permanently capture new capabilities. This
not only protects the knowledge in the event the firm’s application expert leaves but also promotes accountability for everyone to adhere to firm standards.
Are you bringing out the necessary tools for fieldwork? The majority of auditors today carry a laptop, a mobile monitor, and internet access via digital cellular access through their smartphone or standalone hotspot. According to the latest CPAFMA Digitally Driven Firm survey, a significant percentage of auditors are still carrying scanners (and some, even printers) into the field. Mandating the use of a portal or secure email solution in the initial engagement letter (and providing training for the client to utilize these tools) eliminates the need for printers, scanners, and even USB flash drives (which should immediately be disallowed due to cybersecurity risks.)
One of the most effective ways to grow the firm’s advisory services is to identify opportunities with existing clients that already trust the firm. Schedule client debriefs after completing each engagement and task each member with identifying two or three areas of opportunity where the firm can provide advisory services to improve the client’s business. Notify the client about these opportunities during report delivery and then schedule time on their calendar to specifically discuss the most compelling items in the near future.
Auditing your own audit and assurance practices is challenging, but well worth the effort.
Using the improvements described above, your audit and assurance services will become more efficient, lead to more client advisory service opportunities, and will help establish your firm as the go-to practice.
Break away from the “just get the work out the door” mindset and start taking advantage of the technology, strategy, and management components offered to you in this article, today.
A version of this content originally appeared in the Thomson Reuters Accounting and Auditing Newsletter.
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