The increased risk and uncertainty in the current environment of COVID-19, along with the physical challenges of working remotely from isolation poses increased challenges to your auditors. Not only will coronavirus change the way that you have to interact with your auditors and what they require from you in order to complete your audit, there are potential impacts on final audit reports and other deliverables to you as well.

Actions for management to take now

When preparing for the audit this year:

  • discuss with your auditor the most efficient and effective way to work together in light of current remote working arrangements
  • keep an open line of communication with your auditor about any impediments or challenges that may impact the timing of the audit or the ability to evidence transactions and significant judgments.

Common questions

What can management do to facilitate the audit in this environment?

Auditors are modifying their evidence gathering techniques to adapt to the current environment. Their current focus is on the following:

  • Working remotely – for your safety and theirs, auditors are primarily working from home, making arrangements to access your records electronically and via other innovative methods. Be prepared for video calls, perhaps even for observing inventory counts and walking through the operation of your controls.
  • Applying judgement in an uncertain environment – it is difficult to forecast or predict the future given the current level of uncertainty, so using credible sources to form the basis of judgements is critical. Judgements may change from day-to-day as new information becomes available.
  • Forming a view on the truth and fairness of the financial report – there may be times where there is a genuine evidence shortfall. Depending on the materiality and pervasiveness of the issue, the auditor may qualify their opinion or is unable to form a view.
  • Planning and timing – the time taken for you to prepare your financial report and for the auditor to gather sufficient appropriate evidence may take longer. If you foresee issues, raise them early with the auditor and the regulator.

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