One would be hard pressed to find one business that has not been affected by the COVID-19 pandemic. While several businesses have felt challenged in having to operate under constraints that were beyond what they could effectively manage, there were many other businesses that were able to pivot quickly to not only address those constraints but to position themselves in a way that gave them a strategic advantage in the marketplace. I am glad to be leading an audit department which is made up of a team full of smart people that bought in to the idea of making this strategic change – quickly!
GHJ has an annual process in the Audit and Assurance Practice that the team often refer to as reengineering. The Audit Team (and Tax Team members) meet prior to the commencement of the audit to take a critical look at the audit and incorporate changes into the process that will result in a more effective and/or efficient audit. While this typically results in changes to a few procedures, this year the COVID-19 pandemic has forced the firm to completely reengineer its entire audit process through the incorporation of remote auditing.
In a normal year, GHJ performs a lion’s share of its work in the February through April timeframe. However, with this year’s stay-at-home orders in March, GHJ was unable to go to client offices or come into GHJ’s office. Similarly, clients’ staffs were also not able to go into their offices. GHJ had to quickly devise a plan that would involve performing entire audits remotely.
GHJ was fortunate that the Firm had a head start in having a system and process in place for its current remote seniors that had been hired over the previous year and are dispersed throughout the country. These individuals had only spent anywhere from 3-6 weeks of their tenure at GHJ’s Los Angeles office or client sites and were part of a highly functional team working remotely. GHJ was able to use the framework developed for these remote team members and apply it to the wider team by incorporating some very simple but effective tools as part of GHJ’s Remote Auditing Framework:
- Accelerating the use of technology within the audit process:
- Moving from excel-based PBC management system to Suralink, which is a portal-based, interactive PBC System. GHJ’s clients and the team love the elimination of the inefficiencies of email and the clear trail of communication it creates. The portal allows for secure sharing of documents as well.
- Giving teams the ability to instantly access and interpret client’s financial data using Validis.
- Read-only “auditor” access to clients accounting system, disbursements processing system or payroll/human resources system.
This has reduced the amount of information needed from clients and gives the auditors an opportunity to get visibility of the trail of review and approval process in the client’s internal control system.
- Use of videoconferencing for team meetings and client meetings, including ability to share screens, request remote control of team members’ work papers, which resulted in an effective coaching and development experience.
- A structure to deal with chaos around us:
- GHJ quickly developed best practices
that were disseminated to not just internal teams but also share with clients to help provide some consistency in practices. This helped avoid confusion as the team had a clear idea on the sequence of steps needed and who is responsible for each aspect of the processes. The clients found the transparency helpful and also adapted these for their own internal processes in managing their end of the financial workflow.
- The best practices to help with areas where GHJ could foresee some challenges, including remote inventory observation guide, guidance for clients for sharing sensitive data over video conferencing and template status trackers that are circulated to the team.
- Communication, communication, communication:
- Frequent, clear and consistent communication
within the team and with clients is critical, especially while working in a remote environment. This has helped set expectations, establish accountability and meet commitments.
- Clarity of type, frequency and attendees for meetings and use of effective recap emails that help summarize decisions made, follow up actions (including timing of such follow ups) and who would be responsible for them.
GHJ was able to assist its clients in meeting their commitments to the various stakeholders and make critical business decisions based on reliable financial information due to the remote audit structure put in place.
While GHJ will surely return to a certain degree to work from clients’ and the Firm’s own offices in the future, it is certain that the lessons learned over the past few months have increased the extent to which these audits can be efficiently performed remotely. The mix will help free up client office space and resources and help provide a balance to the teams in reducing the amount of travel/commute time that has long been part of the profession. And all of this does not come with the need to compromise quality. In fact, the use of technology and good planning provides opportunities to enhance the quality of the audits performed remotely.
If you have any questions on the above, GHJ’s Audit and Assurance Practice can help. GHJ can provide the tools your business needs to help it recover from this business disruption. We are here to assist organizations to succeed in these very challenging times.