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Remote audit procedures can help streamline the audit process and protect the parties from health risks during the COVID-19 crisis. However, seeing<\/em> people can be essential when it comes to identifying and assessing fraud risks during a financial statement audit. Virtual<\/em> face-to-face meetings can be the solution.<\/p>\n Asking questions<\/strong><\/p>\n Auditing standards require auditors to identify and assess the risks of material misstatement due to fraud and to determine overall and specific responses to those risks. Specific areas of inquiry under Clarified Statement on Auditing Standards (AU-C) Section\u00a0240, Consideration of Fraud in a Financial Statement Audit<\/em> include:<\/p>\n In addition, auditors will inquire about management\u2019s communications, if any, to those charged with governance about the management team\u2019s process for identifying and responding to fraud risks, and to employees on its views on appropriate business practices and ethical behavior.<\/p>\n Seeing is believing<\/strong><\/p>\n Traditionally, auditors require in-person<\/em> meetings with managers and others to discuss fraud risks. That\u2019s because a large part of uncovering fraud involves picking up on nonverbal<\/em> cues of dishonesty. In a face-to-face interview, the auditor can, for example, observe signs of stress on the part of the interviewee in responding to the question.<\/p>\n However, during the COVID-19 pandemic, in-person meetings may give rise to safety concerns, especially if either party is an older adult or has underlying medical conditions that increase the risk for severe illness from COVID-19 (or lives with a person who\u2019s at high risk). In-person meetings with face masks also aren\u2019t ideal from an audit perspective, because they can muffle speech and limit the interviewer\u2019s ability to observe facial expressions.<\/p>\n A videoconference can help address both of these issues. Though some people may prefer the simplicity of telephone or audioconferences, the use of up-to-date videoconferencing technology can help retain the visual benefits of in-person interviews. For example, high-definition videoconferencing equipment can allow auditors to detect slight physical changes, such as smirks, eyerolls, wrinkled brows and even beads of sweat. These nonverbal cues may be critical to assessing an interviewee\u2019s honesty and reliability.<\/p>\n Risky business<\/strong><\/p>\n Evaluating fraud risks is a critical part of your auditor\u2019s responsibilities. You can facilitate this process by anticipating the types of questions your auditor will ask and ensuring your managers and accounting personnel are all familiar with how videoconferencing technology works. Contact us for more information.<\/p>\n \u00a9 2020<\/em><\/p>\n <\/body> Remote audit procedures can help streamline the audit process and protect the parties from health risks during the COVID-19 crisis. However, seeing people can be essential when it comes to identifying and assessing fraud risks during a financial statement audit. Virtual face-to-face meetings can be the solution. Asking questions Auditing standards require auditors to identify […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,14,44],"tags":[40,11,43],"class_list":["post-15040","post","type-post","status-publish","format-standard","hentry","category-aa","category-business","category-finance","tag-article","tag-news","tag-update"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/15040","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=15040"}],"version-history":[{"count":0,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/15040\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=15040"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=15040"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=15040"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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