Survival Guide to Auditing During a Pandemic

By Colleen Cullari, Cullari Carrico LLC – November 20, 2020
Survival Guide to Auditing During a Pandemic

It’s a new world out there; a COVID-19 world. While the masses are fighting the virus, accounting professionals are embracing a virtual work environment — and that includes conducting remote audits.

Most firms were already set up for a “work from home” environment, but although our firm put our resources into technology, we never embraced it for fear of reduced productivity. However, COVID-19 forced us to completely overhaul what our current practices were and put this technology to the test. Our firm has been pleasantly surprised by the results; staff are productive, and most are actually happier in their home settings. 

Although our firm is embracing the change, it’s not without its setbacks or learning curves, especially when it comes to the audit process. For example, our firm did not want to risk exposing our audit staff to approximately 85 different organizations, offices and people; our clients didn’t want us inhouse either. Hence, we were all thrown into the unknown virtual audit environment. We were nervous we would lose the “touch” element of the audit. Clients were apprehensive that they would have increased administrative burdens during already challenging times. We were all very new to this virtual audit process. The fol­lowing are some techniques that helped our firm and our clients get through this challenging year:

Effective Planning to Manage Expectations

When we initially explained the virtual audit process to clients, they were worried that if they uploaded documents as they were completed, the audit process could seem as if it were going on forever. They envisioned us consistently bombarding them for requests in an open virtual environment. Clients didn’t want to feel as though they were going through their au­dits for months on end. Therefore, we had to ensure that our audit was performed in an amenable timeframe, from commencement to completion.

We normally hold planning meetings with clients, however this year we did it a little differently by following these three steps:

  1. We provided each client with a mock schedule of the steps of the audit and the time to complete an audit of their size and type.
  2. We asked for the anticipated audit committee meeting date at which we present a clean draft financial statement.
  3. We set hard calendar dates for each major step of the process: kick off or when the “provided by client” listing would be available; the final due date for all items on our listing; the date of commencement of audit testing; the anticipated completion of audit testing; and the due date of the draft financial report to management.

If the turnaround time was too quick, the client could compare it to the mock schedule initially presented and both parties would rework the details. Sticking to the “date of commencement of audit testing date” and the “completion of audit testing” dismissed client anxieties that they would be bombarded with requests over a longer-than-normal timeframe.

Setting expectations early made each party accountable to the audit process and didn’t prolong the virtual audit.

Flexibility in Testing While Maintaining the Standards

Much of our walkthroughs of internal controls processes and other tests are performed through observation. Since observation can be less time consuming, we were nervous that audits in virtual environments would be less efficient and more costly. Our clients also understood that observa­tion testing methods reduce the amount of paper or e-documents that they have to provide versus other testing methods like inspection or reperformance.

Not being able to physically be onsite at clients for tests of observation had its challenges. We used Teams, Zoom and videos to the best of our ability to accomplish the observation. We actually found that, in lieu of meetings, videos can reduce time spent by both parties on the audit. For example, videos allow the client to pause and start again. This was import­ant in testing physical inventory of assets that were spaced in different areas of one building or in different buildings. There were many other areas of our audit pro­cess that benefited from the use of videos. Just realizing that this was a possibility was a game changer for our firm.

Piggyback on Virtual Trainings

Many of our clients changed processes and systems from one year to the next. For example, some of our nonprofit cli­ents that had minimal technology in place at the start of the pandemic implemented a lot of technology over a three-month time period. In future years, the technolo­gy will likely enhance our audits and make them more efficient. However, during the initial, pandemic-year audit, these new technologies were hard to walkthrough and audit because we were not on-site. Whenever we heard that clients were changing software or technologies to something we were unfamiliar with, we asked that one of our team members join in on the training. Typically these train­ings were free from the vendors (since they were virtual, in a webinar or recorded video format), they lasted anywhere from a half hour to an hour, and we were able to document most of the walkthrough process just by becoming familiar with the software and how it works.

Focus on the Audit Team

It’s challenging to manage a team while in a virtual environment. But we found that having face time with staff to be one of the most effective ways to review workloads, go over client scheduling and to discover any conflicts to the audit process and audit completion. This was also a way to ensure that firm technology was working and new­er staff were being effectively trained. 

Our staff have a mandatory 15-minute morning touchpoint with managers, a weekly 30-minute meeting with assigned partners, mandatory reviews by inqui­ry and inspection on all engagements, and one-hour lunch and learn or formal trainings every other week. Across the board, we have also implemented at each industry level “snap shot spreadsheets” that include details by audit area of the work in process on each engagement.

The last couple of months have been trial by fire, but we have found that through evolving and developing new techniques within our virtual audit practice, clients are happy, staff are able to get through the work and its looking like our audits have actually become more efficient. 


Colleen  Cullari

Colleen Cullari

Colleen Cullari, MBA, is an audit manager at Cullari Carrico LLC. She is a member of the NJCPA Accounting & Auditing Standards and Nonprofit interest groups.

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This article appeared in the November/December 2020 issue of New Jersey CPA magazine. Read the full issue.