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On-Site vs Remote Audit: Which is best for your organization?

The modern audit process in the United States has been around since the early 1900s. Born in response to the stock market crash of 1929, the passing of the Securities Exchange Act of 1934 the emergence of the SEC led to the increased focus on internal controls and investor transparency (source) While many people view auditing as a widely fixed practice, the truth is that practice of auditing is ever evolving. One of the most recent evolutions of the audit practice is remote auditing.

Though remote auditing has been around since well before 2020, this practice has most certainly been accelerated by the COVID-19 pandemic. At Wegner CPAs, we offer both traditional, in-person audit fieldwork as well as remote audit fieldwork.

If your organization is considering a switch to a remote audit, here are some factors to consider.

An in-person audit may make sense if:

  • Most of your records (invoices, deposits, payroll reports, etc.) are not electronic. Converting physical records to digital files is a very time consuming process, and this may create an unnecessary burden for your team.
  • You need a single audit. Single audits are complex and require a lot of samples to be examined. This practice is made significantly easier and more efficient through in-person fieldwork.
  • Your team is able to answer questions or gather information faster when someone is physically present. Consider the culture of your organization. If your team is more efficient in-person, an audit will likely be the same.

A remote audit may make sense if:

  • Your records are electronic.
  • Past remote audits have gone smoothly. This could mean your remote audit finished with little back and forth via email or phone calls.
  • Your accounting staff works remotely. If you operate a remote or hybrid team, there is likely no benefit to in-person fieldwork.
  • Your office is not located near your accountant. This saves on travel fees and other expenses that may be incurred.
  • You don’t have adequate space for the auditors to set up. If you operate out of a small workspace, a remote audit may save your team the headache of making room for your audit team.

The above considerations are not meant to be hard and fast rules dictating whether your audit should be remote or in person, but rather some of the many factors that should be considered.  Perhaps you’d prefer a mix of both options, such as having your auditors conduct limited in-person fieldwork and finish up remotely.

Each organization has a unique set of circumstances and considerations. Please reach out if you’d like to further discuss your organization’s options.

 

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