COVID-19: Remote auditing
This article was created on 26 March and last reviewed on 20 May.
In these unprecedented times there are many challenges that organisations, particularly charities, face. With most charities having either December or March year ends, the onset of another audit cycle adds to those pressures. So what is haysmacintyre doing and how can we help to ease the burden?
haysmacintyre have invested over the years in having a exemplary IT framework and so we are able to assist clients fulfil their statutory audit duties by deploying our contingency plans and offering remote auditing. Our IT infrastructure allows all staff to work from separate locations through a portal system, which accesses the files as if they were all in our office. Managers are able to access the files and review the work as if they were present with the team. We can set up secure platforms for the sharing of documentation and evidence for the audit file (Sharefile and Inflow as well as email) and keep in touch throughout the process.
There are, however, a number of critical requirements that charity clients can do to assist in the process and work together to ensure that we operate as smoothly as we possibly can. These are:
Have a set of accounts prepared one week in advance of any fieldwork timetable. This allows us to plan and focus our work in the right risk areas and helps to identify any reporting changes as quickly as possible.
Have lead schedules with support for all balances in the preparation of the accounts. The charities ‘audit file’ can be sent through the secure portal or emailed to us.
Download the nominal ledger transaction history. From these reports we are then able to select the samples of entries that we wish to test so that your team can extract this information and securely send the information through the portal facility.
Prepare documentary notes on any key judgements and estimates used in the preparation of the accounts. These documents are particularly useful audit evidence but are also helpful internal documents to keep as a permanent record.
Going concern – this is now the most fundamental judgement that is being made when both the trustees and auditors sign off. New guidance was issued by the ICAEW on 16 March 2020 on the areas to consider and the implications for auditors. These are uncertain times, and so one cash flow will not be enough. You will need to consider various scenarios and document the assumptions you are making, and your boards will need to review these carefully before they make a conclusion. As auditors we will also need to critically assess those assumptions and be comfortable with the results.
Additional disclosures will be necessary even for those organisations that have strong balance sheets to evidence the risks that are now faced and the impact these may have on the business, even though we may not have the clarity that we would all like. We are seeing an increasing number of examples in different sectors of these additional disclosures and so we can help you reach a point where your disclosures are adequate in order for us to sign off.
These systems and processes are designed to keep the cycle running with as little disruption as possible, but inevitably there will be matters which delay the process compared to previous years. We want to work with our clients to help them in these times, and hopefully the above sets out an approach that will work for most charities and ensure that, we help you meet your statutory obligations.