VIP Focus: How Board Members Can Help Overcome the Challenges of Remote Auditing During the COVID-19 Crisis

By Jamie Rivette, CPA, CGFM

DashBoard, Sept. 30, 2020

Yeo & Yeo CPAs & Business Consultants

Many people are currently working from home to help prevent the spread of the novel coronavirus (COVID-19). Your external auditors are no exception. Fortunately, in recent years, most audit firms have been investing in technology and training to facilitate remote audit procedures and were already working in a paperless environment. These efforts have helped enhance flexibility and minimize disruptions to business operations. But auditors haven’t faced a situation where everything might have to be done remotely—until now.

Reengineering the audit process

Traditionally, audit fieldwork has involved a team of auditors camping out for weeks (or even months) in a conference room at the district being audited. Thanks to technological advances—including cloud storage, smart devices, teleconferencing and secure data-sharing platforms—audit firms have been gradually expanding their use of remote audit procedures.

But remote auditing still isn’t ideal for everything. Auditing Standards must still be complied with before issuing the auditors’ report. The American Institute of Certified Public Accountants identified the following aspects of audit work that may present challenges when done remotely:

  • Internal controls testing. Auditing standards require auditors to gain an understanding of internal controls. This is an understanding of how employees process transactions, plus testing to determine whether controls are adequately designed and effective. If employees now work from home, your district’s control environment and risks may have changed from prior periods.
  • Inventory observations. Auditors usually visit the actual facilities to observe physical inventory counting procedures and compare independent test counts to the district’s accounting records. Stay-at-home policies during the pandemic (whether government- or district-imposed) may prevent both external auditors and personnel from conducting physical counts. A possible solution to this may be using a GoPro camera or warehouse security camera to focus on a specific area or item.
  • Management inquiries. Auditors are trained to observe body language and judge the dynamics between coworkers as they interview personnel to assess fraud risks. When possible, it’s best to perform fraud discussions in person. However, making these inquiries through a virtual meeting platform can work well, given the current situation.

Moving to a remote audit format requires flexibility, including a willingness to embrace the technology needed to exchange, review and analyze relevant documents. You can facilitate this transition by encouraging your administrators to take the following actions:

Be responsive to electronic requests. Answer all remote requests from your auditors promptly. This will help the auditors move along in their process, almost as if they were right around the corner in a conference room. If a key employee will be out of the office for an extended period, give the audit team the contact information for the key person’s backup.

Ensure privacy controls. With remote auditing, there will be a significant increase in the amount of information transported back and forth. Auditors will need to work with their clients to verify they have a secure method to do this. With a secure portal, the district can provide the appropriate employees with access and authorization to share audit-related data from your district’s systems. Administrators should work with IT specialists to address any security concerns they may have about sharing data with the remote auditors. It is also helpful if the administrator creates a “view-only” login that auditors can utilize to access their system. This decreases the number of requests for general ledger detail, supporting invoices, pay rates, etc.

Track audit progress. Administrators should ask the engagement partner to explain how the firm will track the performance of its remote auditors and communicate the team’s progress to in-house accounting personnel. Consider having a pre-audit planning meeting that includes the audit engagement team and the key contacts at the district to help set expectations for this new process and ease some of the fears the administrators may have. Also consider scheduling quick, daily check-in calls with the in-charge auditor and key employees at the district to discuss open items and follow-up questions.

Ready or not

Communication is key in this new remote auditing world we are facing. Contact Yeo & Yeo to discuss ways to manage remote auditing challenges and continue to report your district’s financial results in a timely, transparent manner.

Jamie Rivette, CPA, CGFM, Principal, leads the firm’s Government Services Group. Her expertise includes audit and assurance services for school districts, governmental units and not-for-profit organizations. She is a Certified Government Financial Manager. Jamie is a member of the Michigan Association of School Boards, Michigan School Business Officials and the Michigan Government Finance Officers Association and its Accounting and Auditing Standards Committee. Contact Jamie by calling 989.793.9830 or email

VIP Focus articles are company-sponsored advertisements and do not necessarily reflect the views or positions of MASB. It’s intended to provide Very Important Partners with a space to share information of value to you and your district.

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