More on e-Audits

Our December 2007 newsletter included an article titled, “Are e-Audits in Your Future?” It discussed the advantages and possible drawbacks of conducting electronic audits from a remote location.

Having remote access to documents and records for audit preparation, and then conducting interviews by teleconference, can save travel time and expenses, as well as, be less disruptive to the auditee. However, not being present at the remote location may reduce the effectiveness of the audit.

The article examined e-audits by assessing their impact on the four primary types of evidence: Documents, Observations, Records, and Statements. One of our readers, Eric Bawden, responded with his e-audit approach using that same framework for analysis.See below in Italics.

Documents: With the proper authorization, auditors could review the remote location’s electronic documents while planning the audit and also see them during the execution of the audit. However, use of a collaboration tool and/or a teleconference will not allow the auditors to see if any uncontrolled or obsolete documents are in use.

“This is not the case in our businesses. Documents are accessed real time and viewed using Microsoft NetMeeting. We take screen shots of the auditee’s desktop and capture file names and retention software that is used for our objective evidence. If an obsolete or uncontrolled document is being used we know as if we were physically at the site.”

Note: The reader is correct for electronic documents. I was referring to any printouts that might be in use.

Observations: Since the audit is remote and video cameras will not be available for full viewing of the facility, the auditors will not be able to see if the work is being done per planned arrangements. So, evaluating conformity will be limited to what can be judged through interviews and electronic records. Auditors will not see poor housekeeping at the site or observe body language during interviews.

“In our remote audits, we ask for pictures to be taken of the areas and sent to us via email. These pictures can be used for poor housekeeping issues, work being done per planned arrangements, and specifically in our test and measurement labs to verify test equipment is labeled correctly.”

Note: Good idea, as long as the photographer is impartial and objective. The auditor could provide instructions on the areas to be sampled with the pictures.

Records: If an organization creates electronic records and scans hardcopy records into electronic format, these records will be available for remote access by the auditors. However, some companies may have a significant number of completed forms that are kept as hardcopy records. Even if the auditors request some of these hardcopy records be scanned for viewing, the auditors would not be physically selecting the sampled records.

“Sample records may not be physically selected, but while viewing a process or procedure where records are required to be retained, we have the ability to complete a random sampling as we are the ones controlling what processes and procedures to view.” 

Statements: In a traditional audit, the person being interviewed is reluctant to have their responses captured on a recording device. As a result, auditors write an abbreviated version of the comments in their notes. If an auditee wanted to, they could later say it was a case of miscommunication.

With remote audits, the auditor keys the questions into the collaboration tool and the auditee types in the responses. A concern is that a more experienced employee could be coaching the interviewee and the auditor wouldn’t know it. Also, with a typed response, you don’t hear the tone and inflection of the voice to aid you during the interview.

“While using Microsoft NetMeeting, we also are teleconferencing. Generally speaking, we set up our interviews with one person at a time, and while coaching could be happening at the other end of the phone, a savvy auditor will pick up the pauses in the conversation and be able to act if necessary.” 

Although the answers are recorded, they will not become a direct part of the audit report. And, the auditee should be made aware of this fact to alleviate any fear they may have about their responses being captured verbatim.

If a teleconference is being held, the auditor captures the responses in their notes, as with a traditional audit. However, they won’t be able to observe the body language during the interview. Even if a video feed is available, what can be gained through observation will be limited.

“I agree with this statement.”

“We have been conducting remote audits in our program for over three years now and while we do find them somewhat limiting compared to onsite audits, we have not run into the issues that you state in your article.”

Thanks very much to Eric Bawden. Comments from other readers?