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Virtual 401(k) Audits – Tips from Summit CPA Group

Published by Kim Moore on May 7, 2020 6:00:00 AM

During these difficult times, auditors are finding new ways to work to avoid face-to-face interactions.  Clients prefer not to have vendors on-site due to the pandemic restrictions and, in some cases, they may be prevented from having the office open to support any audit activity.  What is an auditor to do?

Summit CPA Group has been conducting virtual 401(k) audits for over 7 years. We have found many components as vital to ensuring a successful and thorough audit. We’ve listed a few suggested items to assist auditors looking to branch out to the virtual audit world.brad_open_roller_banner_VIRTUAL CFO 21483

  • Document Submissions -audits require a lot of documentation. In a typical audit, the auditor would request documentation via something called a “PBC” list. They would ask the client to locate the requested information and make it available for review during the time the auditor had scheduled on-site time. So, how do we handle that in a virtual audit? We use a tool called Smart-sheet to provide the client with the same “PBC” list. The client is then asked to locate the information and provide an electronic copy of the information onto the Smart-sheet. Most information in today’s world is already electronic so this is actually easier for the client. The Smart-sheet tool uses encryption to secure any information loaded into it. This ensures the confidential information needed for a benefit plan audit remains secure throughout the process.

  • Discussions with the Client – during the on-site visit, auditors must conduct inquiries of those involved in plan administration. This is an audit requirement. During a virtual audit, we perform those same inquiries using video-conference software. All parties can see each during the discussion, people can join and leave as needed and the software allows all parties to see the screen of a selected participant. This is useful to ensure everyone is on the same page during the call. It allows auditors to view the screen of the client to verify system edits and other walk-through controls.

  • Interaction on the Audit Team – it is critical to maintaining the level of interaction among the audit team. This includes discussion about the audit but also just general discussions. To keep morale up on the team consider using virtual audit software or video conferences to keep everyone engaged. Also, instant message type products have proven useful to quickly share information throughout the audit team or the entire firm.

Virtual audits can cover the same procedures as on-site visits. Enabling additional technology and working through some different processes, can make the virtual audit just as productive as the traditional on-site audits. Try it – you may find out that you like the virtual audit world as we do.

To hear more about the transition from on-site auditing to virtual, listen to this Linked In Live session with Kim Moore, Audit Director at Summit, and Matt Towers from CPA.com.

For more information about Virtual audits, contact our office at (866) 497-9761.

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