It’s time you audited your audit and assurance services.
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, reevaluate and reinvigorate 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.
1. Accept remote auditing’s benefits
In recent years, the acceptance of remote audit work has become the new normal for firms. The remote work environment has shown that an entire engagement team doesn’t need to be at the client’s site every day in order to complete work successfully. For onsite meetings, schedule only those individuals who are assigned tasks better performed in person (e.g., physical inventories). Microsoft Teams or Zoom calls should be set up daily, weekly or biweekly, as appropriate. And only at key points during the engagement with appropriate team members to monitor progress and discuss issues.
→ Limit onsite meetings to individuals who need to be physically present to perform assigned tasks. Monitor and share audit progress by scheduling virtual meetings instead.
2. Invest in hybrid collaboration tools and training
Audit progress often suffers when key people aren’t available to respond to or approve information. Preschedule Microsoft Teams/Zoom meetings as part of the planning process. This helps eliminate time conflicts and allows onsite and remote personnel to collaborate. All members should be fluent in sharing screens, real-time editing and inviting clients and other firm members to participate on the fly.
→ Eliminate time conflicts by syncing calendars during the planning process. Get to know your virtual meeting software.
3. Formalize planning
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. This usually results in over-auditing in noncritical areas. Be sure to:
- Formalize the audit planning process to ensure all team members are present (physically or virtually).
- Understand the scope and risks inherent in the engagement.
- Clarify each role to ensure work gets 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.
→ Complete complex assurance tasks first, plan similar engagements at once and play to engagement members’ niche expertise.
Get my entire list of debrief and planning session best practices.
4. Schedule down days
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.
→ Block out calendar days between audit engagements to stay on schedule (and avoid burnout).
5. Clarify client responsibilities
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. This should include 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.
→ Make sure clients understand their responsibilities. Use a secure file delivery method to keep data safe.
6. Clarify client consequences
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. Notify clients 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’s 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.
→ Make sure clients are aware of their deadlines…and the consequences if a deadline is missed.
7. Enroll in accounting, audit and assurance application training
Many conferences and A&A meetings allow team members to get an update about their firm’s key applications (e.g., 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.
→ Attend conference sessions about the latest audit and assurance technology, and become an expert at the applications your firm uses most often.
8. Eliminate risky, unnecessary field equipment
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. Mandate the use of a portal or secure email solution in the initial engagement letter (and provide training for the client to utilize these tools) to eliminate the need for printers, scanners and even USB flash drives (which should immediately be disallowed due to cybersecurity risks).
→ Fieldwork requires a laptop and a hotspot (maybe a mobile monitor). Anything else is either not secure or unnecessary. Avoid USBs and mandate the use of a portal or secure email solution for passing client files and information back-and-forth.
9. Identify advisory opportunities
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 have each member identify 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. Then, schedule time on their calendar to specifically discuss the most compelling items in the near future.
→ Task each firm member with identifying a few advisory service opportunities after the engagement is completed but before the final client meeting takes place. Share these business opportunities with the client during report delivery (and get that advisory meeting on their calendar right away)!
Don’t fall for the “just get the work out the door” A&A mindset
Auditing your own audit and assurance practices is challenging, but it’s well worth the effort.
Using the improvements described above, your audit and assurance services will become more efficient, leading to more client advisory service opportunities and helping 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 in this article.
A version of this content originally appeared in the Thomson Reuters Accounting and Auditing Newsletter.
