Remote working and auditing – LATCOs

by Zoe Plowman

As we all transition to the “new normal” the hot topic for discussion is – to be in the office or not to be in the office? Clearly there are pros and cons for each.

Council offices have had most staff working from home since the start of the pandemic and whilst remote meetings allowed Council business to continue, poor internet connection and general unfamiliarity with technology didn’t always allow for efficient proceedings.

Earlier this year the High Court ruled that Council meetings could no longer be held remotely without further emergency legislation, so what we are left with is a hybrid model of working with meetings in person but also being live streamed.

Everyday business is also a mix of staff working at home and staff in the office, and many have   adapted as best they can in a very challenging environment to continue their everyday business.

One of the many challenges is dealing with the Council auditors and auditors of the Local Authority Trading Companies (LATCOs) remotely, with an onus on ensuring that timetables are still met and the transfer of data is done In a way that doesn’t compromise security procedures and confidentiality.

As we slowly move from everyone working at home to more hybrid ways of working, the need to constantly reassess processes and controls is paramount. Generally, the COVID-19 working environment increases the inherent risk of fraud. Therefore, questions from auditors this year are likely to be more testing.

In addition, for accounting periods commencing on or after 15th December 2019, revisions to auditing standards (ISA (UK) 700) came into force. This revision extended the requirement of auditors to include an explanation in the audit report explaining to what extent the audit was considered capable of detecting irregularities, including fraud.

Whilst this isn’t a new area, the requirement to report on it is. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error.

The following areas may have changed in the last year;

  • Significant laws and regulations in the context of the entity. (i.e. Additional Health and Safety requirements)
  • Compliance with the legal and regulatory framework. (Breaches and claims)
  • The entity’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud and how thee have been adapted to allow for remote working.
  • The effectiveness of any new controls implemented.

It’s been a difficult year, and the landscape is continuing to change, Internal controls may not be operating the way they usually do. Stay vigilant, and continually monitor and document changes in the control process – In the current environment suspicious or unusual activity be even more difficult to spot!

Author

Zoe Plowman

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