4 Focus Points Organizations Need to Consider During a Virtual Audit
As organizations close out another quarter during the pandemic of 2020, it’s crucial that they continue to evaluate and refine their virtual close process, especially when the time comes for a virtual audit. It’s also important to note that many problems which crop up during an audit can be boiled down to a single source: spreadsheets being utilized as the primary close tool.
Here are four aspects that organizations need to focus on when heading into their virtual audit.
Focus on Accuracy
When working with data in a virtual close, first thoughts might be relegated to accessing data or restricting access to sensitive data. While these are certainly important aspects when assessing the integrity of your organization’s financial close, finance and accounting teams must ensure that the data their teams are accessing is accurate.
Before the financial close process ever became virtual, 40% of global financial leaders admitted that they didn’t trust their financials to be accurate. Many of these leaders utilized spreadsheets as their primary close tool, and these statistics were reported when the close process was progressing in a traditional office setting, so that number has likely only increased.
As organizations close out quarters in a virtual setting, the numbers they report to internal and external stakeholders must be able to be trusted. And if your organization uses spreadsheets, studies have shown that 90% of spreadsheets contain errors. As a CFO or participant in the financial close process, can you collaborate with auditors and trust that the numbers you’re supplying are correct?
Need for Centralized Data Center
As accountants shifted from a central office building to various, dispersed locations, methods of communication transformed. Finance teams could no longer walk over to a team member’s desk and ask a question. Now questions and clarification requests have to be sent through email and instant messaging platforms. Because of the shift in the way business is performed, it would make sense that the way the financial close was performed would evolve as well. Spreadsheets don’t allow for comments, notes or supporting documentation to be attached, and are an especially ineffective close tool when needing to communicate virtually.
Additionally, data needs to be stored in a single secure location in order for the virtual close to be performed. The Cloud provides a safe, controllable environment to house a virtual financial close. It also enables communication within finance and accounting teams so the close process can be completed accurately and on time. When a virtual audit takes place, all the required files can be accessed and provided to auditors with ease.
Thorough Documentation Process
When organizations coordinate with their auditors, it’s not only the numbers that are important, it’s the explanation around them. The ability to answer questions such as “What controls changed and why?” or “Did your finance team use the Cloud before the close was virtual?” is invaluable. To be able to provide auditors with a reliable, detailed report of these aspects, finance and accounting teams need to be thoroughly documenting their processes.
With spreadsheets, this documentation process can be fairly complicated and time-consuming. However, when your financial close process is automated and stored in the Cloud, providing this documentation becomes significantly more feasible.
Automating for A Simpler Virtual Audit
Manual processes and spreadsheets aren’t the most reliable virtual close tool, especially as they limit communication and complicate the overall process. Considering the introduction of financial automation to your financial processes not only speed up close tasks, but also saves time to focus on value-adding tasks and simplify future audits.
Implementing automation to your financial close process yields organizations many advantages, especially when it’s time for a virtual audit. Customers that use the Adra Suite have reported a high ROI in the form of cost-savings and other benefits such as:
- Increased accuracy of financial reporting, resulting in less audit expenses
- Reduced risk of non-compliance with stakeholders and applicable regulatory bodies
- Automated audit trail for auditors to utilize easily
- Secure centralized, cloud environment to execute a virtual close
The Adra Suite of Solutions by Trintech delivers four products that work together to automate and streamline the close, improve accuracy and reduce risk, and provide actionable, business-critical insights. The suite seamlessly integrates with many financial systems, such as ERPs, allowing your office of finance to close faster with confidence. Not only that, but the software is easy to use and quick to implement, and can reduce your close time by 300%.
Task Manager and Balancer allow us to easily track our journal entries, our reconciliations, who’s responsible for what, and then who reviews and approves it along with comments. So when we go through our audit, it is super easy to track everything. – Genesis Systems, Adra by Trintech Customer
This on-demand webinar with Trintech, KPMG and Workiva discusses the methods organizations can apply to drive greater process efficiency, visibility and control in the virtual close process.
Written by: Ashton Mathai