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Remote auditing – work on internal controls

The spread of the coronavirus pandemic (COVID-19) resulted in the rapid adoption of remote working, including remote auditing techniques. This extract from the Audit and Assurance Faculty Know-How guide 'Remote auditing in practice' focuses on work on internal controls.

A key element of the risk assessment in all audits is the entity's own risk assessment. Many entities, particularly smaller entities, may struggle to keep that assessment up to date as restrictions were imposed, lifted again, and phased returns to activity implemented. Many will seek the views of auditors, potentially giving rise to independence issues.

Auditors need to remain aware of the need to demonstrate their independence when providing any advice, and for the audited entity to take responsibility for the risk assessment. However, advice from government and trade associations for smaller entities means that many smaller entities may perform risk assessments specifically related to COVID-19 issues efficiently and effectively. Auditors should endeavour to focus on those elements of the risk assessment that seem more likely to have a specific impact on the financial statements, although it may be more difficult than usual to separate these out.