Audit Tips

June 19, 2020

By Martha Genest, Managing Partner, Centre for Audit & Risk Management (CARM)

   Audit Tips   

As technology has evolved, auditors have gained flexibility in working remotely. The COVID-19 crisis has tested our ability to adapt quickly and use the technological tools at our disposal. In this new environment, managing relations with auditees requires an even higher degree of intuitiveness and interpersonal skills than usual. This Audit Tips edition offers guidance on how auditors can effectively manage relations with auditees during these challenging times.

	Be Certain Before starting any audit engagement, revisit your risk assessment and be certain of your audit office’s strategic direction. Conducting an annual risk assessment is no longer enough—it must be done more frequently. It is important to reprioritize the auditee’s top risks during times of crisis. Many audit offices are already updating their risk assessments due to this crisis, resulting in them discontinuing or reducing the scope of audit engagements. Ensuring that audit products going forward are still addressing relevant high-risk areas will also help build trust with the auditee.
	Be Aware Make extra effort to understand the auditee’s roles and responsibilities prior to engagement. Although it may not be clear on an organization chart, the individuals you need to engage with during the audit may have been reassigned to address COVID-related issues or are supporting or back filling for those responding to the pandemic. You need to be aware of these realities and have discussions with the auditees about these changes when reviewing the risk assessment and developing the audit approach.
	Be Realistic To avoid frustration and damaging relations with the auditee, you need to be realistic about the impact that the new environment may have on audit timelines and delivery dates. Because many entities’ activities and events are cancelled or delayed, naturally the completion of audits may also be compromised. Establish clear communication with the auditee so that any delays that may arise during the audit are quickly flagged and discussed. This will be beneficial for both the audit and the relationship with the auditee.
	Be Informed This is an excellent opportunity to get to know your auditees to the best of your ability. Because of social distancing, chances are that personal contact with your auditees will be limited, regardless of their responsibilities. Seize this opportunity to improve your understanding of the audited entities, especially how they respond to a crisis, and strive to find as much information as possible on your own to reduce the number of information requests sent to the auditees. This will provide your auditees with additional time to focus on their changing environment.
	Be Flexible As we all try to either get back to normal or create a new normal, we can all count on navigating change. Auditees will also be adapting to a new normal in their environment and workload. During the audit, you will need to provide extra flexibility to the auditee if you want to continue to preserve your relationship, as well as your reputation as a respectful professional. Expect that the auditee will request extensions and, sometimes, deferral. In a time of crisis, these types of delays are to be expected and flexibility is crucial.
	Be Transparent Demonstrating transparency with your auditee, especially during times of uncertainty and change, will help lay a foundation of trust. The goodwill generated will ensure that the relationship with your auditee remains productive. If you nurture a transparent relationship, then there is a much higher chance that the auditee will be transparent with you in return, providing you with timely information that will be critical in an audit environment where risks are being reassessed and audit products and approaches are being reexamined.
	Be Honest During these uncertain times, it may be more difficult for you to offer guarantees to the auditee. As the risk assessment continues to be reviewed, with environmental scanning constantly being updated, the audit scope and timeline could shift. To ensure that the auditee’s trust is not damaged, be careful when communicating aspects of the audit that are still not clear. You will benefit from keeping your word on issues that you do have direct control over. For example, if you promise you’ll share an early draft with the auditee, then you should make extra effort to honour that promise.
	Be Human As with most professionals, auditees have had to adjust their life and workload in this new environment. Managing successful relations requires that we find common ground with the auditees and connect with them on a human level by showing empathy and respect. With restricted personal contact, it may become even more difficult to receive timely compliance with audit requests. By establishing and maintaining a human connection with the auditees, there is a higher likelihood that you will remain on their radar.

During this time of uncertainty, managing relations with auditees will become even more challenging. However, if the audit community embraces this as an opportunity to become more familiar with the auditees’ strengths and weaknesses, this investment will lead to stronger communication and responsiveness. And, over the long term, focusing on successfully managing relations with auditees will lead to more efficient and effective audits.

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