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Student Insights

Hybrid working: the future of audit

Author: ICAEW Insights

Published: 03 Sep 2021


Over the past 18 months, audit teams have had to adjust to remote working, finding innovative solutions and making greater use of technology to get the job done. So is a virtual model here to stay?

When the UK government announced a national lockdown on 23 March 2020, many businesses’ operations and interactions moved online overnight. For audit teams, used to working at client sites and liaising in person, the ‘stay at home’ rules presented particular challenges. Thanks to existing technology, though, some of them could be overcome quickly, says Paul Hodgett, a partner at Haines Watts in Esher, Surrey. “One of the things with audit is that it’s always been fairly mobile – obviously when we go to clients we have our laptops with us and connect to our systems from there,” he says. “And so actually, switching to working at home rather than working at a client site was not that different.”

For clients with good IT systems already in place, the transition was also fairly smooth. “With online software like Sage and Xero, clients can give us remote read-only access to their systems, so we don’t need to be there beside them to see reports run and that kind of thing,” explains Paul. For those who were still more traditionally paper-based, it was a case of finding workarounds, such as using online banking statements rather than printed invoices as evidence of cash flow.

Even for things like stock takes, creative solutions were quickly found: “We used FaceTime or Zoom, so we’d have someone from the client in the warehouse and we’d tell them where to go and what to do – count the number of items in that pallet, for example,” says Paul. “And so we managed to continue like that initially. As we got further into the pandemic, people were a little more relaxed about having one person from the audit team on site.”

While much of the technical work could be successfully carried out remotely, what was missing, says Paul, is the added value that auditors bring from really getting to know a client and their business. “There is a downside to not being physically at a client site, because you miss out on some of the intangible aspects of doing the audit,” he says. “When you’re with a client, you see how things happen. A client will tell you how something is meant to happen, or how they think it happens, but when you’re on site you may see it happen differently, and so you miss potential opportunities to help the client. Even meeting someone in person is still so different from doing it on Zoom.”

The other downside of teams not physically being together is the impact on junior members, particularly those who have joined during the pandemic. “When you’re the senior member of the team delegating work, it’s so much easier to show them what they need to do and how to do it when you’re sitting next to them in an office,” Paul says. “Sometimes they may have a 10-second question or need a quick reminder of how to do something, and if they have to phone someone or arrange a Zoom, that may not happen and they can miss out on that learning. Even just hearing what’s going on around them in the office has immense benefits that they miss out on at home, and I think they have struggled for that.”

Samantha Kimberley joined Azets in Southampton, Hampshire in August last year, and so far almost all of her experience and training as an audit associate have been virtual. “I managed to go on one audit with my manager for four days, and that was really good to get to know him better, because you don’t get that behind the screen so much,” she says. “Other than that everything has been online. I’ve had so many calls, and I’ve had to learn systems online. It’s all been part of the learning process.”

While remote working has had its challenges, it’s the online studying that Samantha has found most difficult over the past year. “So far my ACA training has been 100% online, and I’ve sat exams remotely too,” she says. “That’s been a very steep learning curve. Having a class where you stare at a screen for a whole day is exhausting. And when you don’t understand something, it can feel like you’re the only one – you’re seeing messages pop up and everyone else has got the right answer. Mentally I found that very hard. You want to be in it together, and you just don’t feel that at all. So I’ve definitely found the studying a lot harder, and I’m really looking forward to going back to in-person.”

In recent weeks, Samantha has gone into the office for the first time, “Just so that we can see each other’s faces! I’m always surprised that people are a lot taller than I think behind the camera,” she says. One of the advantages that has come out of the pandemic, she believes, is the more flexible approach to working – something that may not have been so readily available for young people coming into the profession a few years ago. “I feel you’re treated a lot more like a person,” she says. “On Teams, you can see who’s on and who’s off – you can see, for example, that someone is taking an extended lunch break and they’re going to catch up the time later. And I think that happens less in the office. It comes from having a good employer as well, but I think you’re seen more as an individual who’s got a life and is trying to juggle a lot of things at the same time.”

As things open up more, audits are starting to take place in person again too. “As with everything, it depends on the client,” says Paul. “Some prefer us to be there because they feel it’s more efficient, and then at the other end of the scale you have those who only want their own staff on site, or who have moved away from having an office at all. So we’ll do what clients are comfortable with.”

Like many firms, Haines Watts and Azets are adopting a hybrid model – an evolution that was already happening, thanks to digital transformation, but which has been accelerated by the pandemic. “We might have initial planning meetings over Zoom, then send one or two people out to the client for a couple of days to collate all the information and bring it back to the office for the team to work on,” explains Paul. “Then when we’ve got follow-up queries, we’ll collate them and have one person from the team spend a day at the client’s site to get answers to those queries, then bring them back to disseminate to the wider team.”

The beauty of such a model is that it is customisable, depending on the client and their preferences – and potentially more streamlined and efficient. “The technology has been there for some time, it’s about helping clients come along with that way of working,” says Paul. “Some are always going to prefer to show you things and have paper copies of everything, and if that’s the case it’s easier for the team to be on site. But going forward I think the hybrid model will be the one that we will work with more, spending perhaps two days a week on site with the client and three back in the office. And that will hopefully be somewhat more efficient.”

Samantha believes that the situation over the past 18 months has encouraged us all not only to be more flexible, but also more willing to question the status quo and find new – and improved – ways of doing things. “Some things do work better,” she says, “and you don’t do things so much because they’ve always been done a certain way. Because everything is changing, you can question it and say, ‘Do we really need that?’ I think it’s made us all more adaptable to change, and to have that questioning mindset, which is great. There’s still an element of ‘Let’s see where we’re going’, but it’s eyes wide open and nothing set in stone – and that’s something we’ve all learned over the past year.”