Audit Trends for Companies in 2021

In 2021, the Covid-19 pandemic has affected every aspect of human lives. The pandemic has caused severe shortages of various resources and has costed many lives worldwide. It has ill-affected the lives and lively hoods of many families and pushed them closer towards poverty. Economic growth has receded in many countries resulting in the loss of jobs. The most important effect of the Covid-19 pandemic is that the pre-covid solutions no longer apply to the world post-pandemic. Post-pandemic world problems should be approached non-conventional and result in a paradigm shift in the human thought process. Finally, the post-pandemic world has to adapt to the new normal.

Auditors may discover that current circumstances in the post-pandemic times bring opportunities to approach things differently, including new or flexing the use of modern technology resources to carry out their job. However, the auditors may not have considered these uncertain and unpredictable pandemic risks during audit planning or underestimated the risks that need rethinking.

It is essential to have regular communication between company management, auditors and the audit committee to overcome the unforeseen challenges and ensure that the audit is completed. It is required as the pandemic-related risks may not have been considered during initial audit planning, or the identified risks were very different from the current situation.

The company business may be disrupted in the prevailing scenario, and evolving risks and assessments must be disclosed to the management. During the Audit Services, all the encountering challenges while performing the originally planned exercises and accessing related evidence should be considered. Auditors should adopt and start using the latest technology applications to their existing applications to carry out the audit. Auditors should consider the changes in the current reporting structure and external environment because of guidance applicable on accounting standards and regulations, and new transactions. Auditors should consider all quality control policies and processes relating to audit direction and supervision of engagement teams and review their work.

Work From Home will continue, posing new challenges for Internal Audit Departments

The current work from the home environment may continue. However, the remote workforce presents new challenges and risks to company internal audit teams, which further have to adjust their entire audit procedures to work in a remote setup—adopting new technologies like video conferencing, cloud file-sharing platforms with the necessary security, and virtual security private networks (VPNs) etc.

Privacy Audits are Vital Components of Audit Plans

Company Internal Audit teams must strategically consider employee and organization privacy. The auditors should audit all the procedures that the company employ to handles and protects sensitive organizational data. As an independent company function with a thorough understanding of company operations and policies, the internal audit team is equipped to perform audits and assist companies in improving their current privacy programs.

Cybersecurity System Audit

Company management and board demand more insight into potential cyber risk as the ever-growing digital world is prone to increased cyberattacks, further devasting businesses worldwide. Due to the thorough understanding of the company’s risk landscape and exposure to the technology used across the company, the internal audit team will be in a solid position to assess deployed cybersecurity processes, digital policies and reports on the effectiveness of the security infrastructure. In addition, the internal audit team can take assistance from an independent cybersecurity consultant to ensure a good audit.

Expand Skillsets and Specializations

The role of an auditor has evolved from the usual compliance-centric approach to establishing as a trusted business advisor to the company. In the ever-changing world, to meet all stakeholder expectations and detect unforeseen threats, the internal auditors must expand their current skillsets and specializations outside of the core compliance centred audit system in the coming years. With areas like cybersecurity, privacy, automation, cloud technologies and remote work models on the rise, the auditors must expand their understanding of new technologies and tools supporting these areas and their technical capabilities.

Internal Standards on Auditing

Auditors should adopt standards such as ISA 315, ISA 330, ISA 560, ISA 570, ISA 700 & ISA 701 accordingly for the changing situations in the post-pandemic world. Auditors should identify and assess the risks of material misstatement, address concerns, respond to assessed risks, provide necessary opinions, and submit audit reports to company management.

Why Us?

We at Jaxa Chartered Accountants consider all the factors to carry out company audits and adapt to the changing situations. Our client-centric approach has ensured that our clients are supported all the time without any interruptions. Please Contact Us for any assistance regarding the audit-related services. We’d be delighted to assist you!