Auditing is basically an examination of an organisation to ensure its compliance with requirements. It is an extremely important process, which can reveal some shortcomings in businesses and governmental institutions. However, the quality of audit might have just gone worse because of COVID-19 pandemic.
Usually, auditors assemble on-site – in the clients’ offices. While most of the data has long been digital, some documents are still paper. Also, direct access to internal networks is easily granted while on-site. Of course, pandemic forced everyone to work from home, which led to the widespread adoption of virtual meeting platforms. Audit teams didn’t have to meet on-site and in person, but how did that change the quality of their work?
Scientists at the University of Waterloo assessed the effects of virtual meetings on the quality of audit and found that it’s gone worse and the reason is trust.
Researchers discovered that virtual meetings created less trust and more distance between a coach and junior or between a reviewer and preparer. Lack of sense of connection didn’t help either. In general, members of audit teams shared less knowledge, didn’t really work together and couldn’t achieve the same results as using more conventional auditing methods. Not only did this lead to a worse quality of work, but caused cost overruns as well. And the lack of trust could actually be even more damaging.
Tim Bauer, one of the study’s authors, said: “It’s interesting because trust is also vital for users of financial information. Can you trust that a company’s financial statements are credible and fairly stated? Efficient and effective audits build trust in that information. If the audit process suffers because of physical dispersion of team members or virtual information sharing, then financial information quality could suffer too.”
The world is slowly readjusting to a post-pandemic environment, which includes coming back to the usual working regimes. Scientists expressed hope that trust in the professional environment can be rebuilt and that research into the effects of remote work can be expanded in the near future.
Source: University of Waterloo