Posted: 09 / 09 / 2020
By Dan Wilson, Audit Partner at Sedulo
The outbreak of COVID-19 and the restrictions on the movement of people have created several challenges for auditors. However, at Sedulo we believe the current situation should not undermine the delivery of high-quality audits in a timely fashion. Here are some of the steps we have taken to ensure our audits have run smoothly and efficiently for our clients.
Utilising technology
We’ve been using Microsoft Teams, secure file transfer portals and computerised audit files for several years. With the switch to remote auditing, both Sedulo and our clients have found this transition seamless due to our extent of knowledge around the technology available.
Our computerised audit files have ensured manager and partner reviews can be carried out promptly from their homes. We have been able to host virtual planning meetings, have regular updates with clients on the progress of audits and final audit committee and board meetings to approve the accounts all via Teams or Zoom.
We have vast experience with many accountancy software packages, including, Sage, Xero and Horizon. Where possible, we have been sent back ups, logins, or given remote desktop access to enable us to extract the required data directly from the clients accounting system, thus saving hours of time for the clients. Online packages such as Xero now contain copies of invoices within the system allowing them to be reviewed without intrusion, helped by software such as Receipt Bank enabling paperwork to be easily imported.
First-year audits
We have been able to conduct reviews of the predecessor’s audit files and working papers remotely via share screen functionality on Zoom or Teams and the files available as read-only on screen.
Communication remains key
We recognise that for many businesses, having their audit completed is not their top priority. However, with remote auditing, there is greater flexibility around communication, aligning the audit with the businesses demands and resources.
We were able to work on the majority of audits with what could be accessed remotely, then provide one list to the company of the information they would need to obtain from their offices. This allowed clients to limit the time in their office to one trip to deal with the audit for those whose offices were not open.
We have found it even more important than ever to have a detailed discussion at the planning stage to understand the business and its needs and adapt our schedule accordingly.
Reviewing systems
Conducting a walkthrough of systems is more difficult remotely but can be overcome. Many firms have had to adapt their systems as a result of the current situation. An audit now involves not only reviewing the procedures in place for the majority of the year but also the effectiveness of the new systems adopted post lockdown.
A good purchase order (PO) system should be able to adapt to remote working and software, such as ApprovalMax, are becoming more popular to speed up the process of the approval of purchase invoices. The days of a director coming back into the office after a few days out to a pile of PO’s to approve should be long gone.
Stocktake solutions
Our main priority throughout the pandemic has been the welfare and safety of both Sedulo’s and our clients’ teams whilst ensuring that all government guidance is followed.
In terms of stocktaking, there have been several different solutions our team has implemented, including:
- Conducting the stocktake at a later date and tracing back to the year-end date
- Using software, videos and photographs to confirm the existence of stock at the year-end date
- Attending the stocktake and ensuring that social distancing is adhered to
Going concern
Due to the uncertainty over the future, a company’s ability to continue as a going concern is a major consideration for all businesses in the current climate. We want to ensure correct disclosure in every set of accounts to give protection to both the directors of the business and ourselves.
We have increased our testing around going concern which includes:
- Increased analysis and stress testing of forecasts/budgets
- Reviewing after date bank transactions and balances
- Detailed discussions with management
- Enhanced disclosures within the notes to the accounts
- Review of the businesses performance post-year-end throughout the period to the date of sign off to ensure that the pandemic has not materially affected the ability to continue as a going concern