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With no sign that the pandemic is going away, statutory auditors have been forced to rethink the way that they carry out their work so that they can protect their staff and the client while still producing a high-quality piece of work.Auditors have had to adapt their approach to the statutory audit in a number of ways:Timetable, budget and fee — Additional work may be required due to the need to adopt a different methodology. As such, the auditor needs to reconsider how this would impact the timetable, budget and fee. In addition, with the likelihood of staff needing to work from home, needing to isolate or getting unwell, this may have an impact on the auditor’s ability to meet tight deadlines.Remote team working — The planning, management and review of work are all made harder with remote working and this needs to be considered, while at the same time ensuring that quality standards are maintained.IT security — Wisteria already had good secure working methods in place to ensure that staff could work effectively at home. This includes a secure VPN, a secure web portal, the use of Microsoft OneDrive as a document depository, a Cloud version of CaseWare auditing software, and Microsoft Teams.Obtaining evidence remotely — Part of the audit work is to obtain evidence. Some of this is usually done in person, however, this is not always possible now. For example, one test might be to physically verify the existence of tangible fixed assets. The auditor would need to consider alternative ways of achieving this including the use of software such as FaceTime.Going concern — For those companies adversely impacted by the pandemic, they may find it difficult to provide reliable evidence that they are a going concern. Forecasts will most likely be unreliable. Management assumptions will have been made regarding Government assistance and economic recovery. These assumptions will need to be scrutinised. The auditor will need to be really focused on this major area of the audit and become comfortable that the directors have fairly explained the risk that the pandemic may have on the future prospect of the company. The auditor will need to consider if a reference to this risk needs to be further highlighted in their audit report.Fraud — The auditor is not engaged to sniff out every element of fraud, however, they should exert a level of professional scepticism when carrying out their work.  The net result of this is that they may well unearth fraud that occurs. It is thought that the pandemic will be a catalyst for new types of fraud:

  1. Tax fraud as companies are under pressure to preserve cash

  2. With internal controls needing to change to cope with remote working, client staff may be tempted by new methods of fraud

  3. False claims on Government schemes

In summary, the auditor needs to work harder to maintain the high standards of audit work required, and at the same time, meet client expectations. The auditor needs to think outside of the box to find solutions to get around the old methods of performing an audit. The auditor needs to embrace change to both their own work practices and those of their clients.

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