THE COVID-19 global pandemic has accelerated the shift to digitalization and changed the way the way people work, including the way auditors perform their role, an executive of one of the country’s auditing firms.
Since the start of the pandemic in 2020, audits have been going remote. Thanks to technology, auditors can still gather and analyze evidence and perform due diligence on their clients, even mostly from the safety of their homes or in offsite locations.
And it looks like this work around is here to stay, Romualdo V. Murcia III, partner and practice leader of the audit and assurance division of P&A Grant Thornton, said.
The role of auditors has never been more important than in the context of the rising risk exposures of business and society during the pandemic, according to Murcia.
“While companies and institutions rely on auditors for crunching the numbers and issuing audit reports, we must go beyond our traditional roles by strictly adhering to quality audit standards to spark confidence and promote deeper understanding through the numbers,” he added.
Admittedly, such is easier said than done in the time of pandemic.
Prior to the pandemic, auditors would typically burn the midnight oil in the confines of their workplaces, especially during the tax filing season in April, to complete their audit reports on clients. They would perform due diligence and data gathering by visiting clients’ offices.
“With the risk of exposure to COVID-19, audit teams resorted to creative solutions to work around lockdown limitations and these have led to new methods for evidence gathering,” Murcia said.
Audit professionals have also turned to video conferencing technology not only for meetings with audit staff but also for other client interactions such as a virtual walk-through of audit processes and verification of company data.
“Valuation of company assets such as impairment of losses, audit of receivables, and recoverability of assets poses a challenge to auditors” as these largely depend on documentation provided by clients, Murcia added.
“Sometimes these entail a long wait, as the client is also dealing with its own work-from-home challenges.”
On the other hand, doing things digitally also improves transparency. For example, he said reviews and approvals need to have digital signoffs so it is easier to keep track of accountabilities.
“Many firms now have the capability to digitize documents and transfer data electronically so it’s easier to access information now.”
However, he cautioned that incidents of fraud still cannot be prevented even with firms’ increasing reliance on technology.
“Digital will not address the moral issue,” Murcia added. “This is why auditors must always have a level of skepticism, especially when it comes to management overrides, company connivance, and authenticity of documents. This is, after all, why auditors exist.”
These and other issues affecting the audit profession will be tackled in the 21st Annual National Convention of the Association of Certified Public Accountants in Public Practice (ACPAPP) set to be held virtually from October 6 to October 8. Murcia is overall chairman of the convention, which is themed, “Lead the Way: Recovery through Transformation and Innovation.”
As published in BusinessMirror, dated 29 September 2021