No one was prepared to have all their auditors and clients working from home. When the pandemic first hit this spring, we all had to improvise and do the best we could with the hand we’d been dealt. Somehow, we made it through the summer busy season, worn out but proud of what our teams were able to accomplish under the most challenging of circumstances.
Audit teams are now getting ready to enter the winter busy season, with the pandemic still ever-present, and many offices and businesses still closed. Before auditors get too deep into the next cycle, let’s pause and take stock of the lessons learned from this first phase of remote auditing to see how your firm can build on what has been accomplished and make adjustments where necessary.
The challenges of managing a team remotely
Auditors have many stories about the problems they have observed with managing an audit team and clients remotely: a lack of spontaneous and informal communication; misunderstandings that arise because of too much reliance on emails; juggling home and work responsibilities; and Zoom fatigue.
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Sanket Das heads the distribution management practice at a Big 4 consulting firm. He is an industry thought leader and often speaks on topics related to insurance and sales performance management (SPM). With nearly 15 years of experience in the insurance space, Sanket tackles complex issues around distribution and producer management, AI, data, actuarial valuation, and agent compensation. He holds a master's degree in actuarial science from NMIMS. Connect with Sanket on LinkedIn.
Effectively addressing these challenges requires going past the most obvious observations to try to get at the root causes of the problem. Based on our research and observation, we’ve identified four primary issues that must be addressed:
1. Lack of access to managerial support. Team members need both task and relationship support. Of the two, providing task support — telling people what to do, and in some cases, how to do it — generally is much easier. This is especially true on an audit team, which is overtly task-oriented (“complete the audit program”) and organized hierarchically according to knowledge and experience. Auditors are accustomed to working in an environment in which someone with more experience provides guidance on how to perform certain tasks.
Providing the relationship support is more difficult. When auditors work long days, side by side, all aspects of their personality — for better and worse — are on display. This transparency, while at times overbearing, enables supervisors to identify and respond quickly to those who need emotional support.
Out of necessity, planned calls are more highly structured and much shorter. Everyone is on their best behavior; team members can hide their struggles, frustrations and failures. Without seeing the full range of their team’s needs, supervisors can quickly lose sight of the need for them to provide relationship support, which in turn contributes to the sense of isolation many remote workers feel. To complicate matters further, audit teams are constantly changing. Just when the team starts to hit its stride, the audit ends, the team disbands, and the auditors scatter to form new teams and start all over.
2. Lack of mutual knowledge. In a remote working environment, it takes extra time and effort to get information from the client and from other team members. In some instances, proceeding without all the necessary information may seem like the best path forward to meet budgets and deadlines, at least in the short term.
Without a way to share information freely and informally, it is easy for important information to become siloed. Not only do team members lack a shared work experience, they also lack a shared knowledge base. Working remotely increases the barriers to experienced team members sharing knowledge about the audit and the client with those new to the team.
3. Lack of social opportunities: At its core, auditing is a team sport, and good teams run on chemistry built around mutual trust and respect. A lack of trust and respect not only makes the work less enjoyable, it makes the team less efficient.
When co-locating, we take the social opportunities for granted; the informal relationship building that occurs during breaks, quick walks to get coffee, or over lunch. When remote auditing was first thrust upon us, many did not really understand how profoundly working remotely erodes relationships. We are still gauging the impact those compromised relationships have on audit effectiveness and efficiency.
4. Working from home. We all face challenges working from home, whether it’s tuning out distractions from roommates, homeschooling the kids, or just finding the physical workspace to be productive. What’s important to remember is that everyone has some form of challenge working from home.
The most common way to manage these challenges is to adjust one’s schedule to meet the various demands. When everyone on the team is adjusting their work schedule (as is the client) the ability to get quick answers to simple questions becomes more difficult. Progress moves much slower. In the long run, blurring the boundary between work and home can cause both parts of one’s life to suffer.
Meeting the challenges of remote auditing
While technology is part of the solution, improved technology is not all it takes to meet the challenges of remote auditing. If auditing is a team sport, then investing in new communications technology is like investing in new equipment: helpful, but just a start. As with any technology, the key to improved performance rests with how you use the technology and not the technology itself.
Firms are already beginning to see the limitations of simply moving all communication to scheduled video calls. The issues caused by remote working conditions are complex, and the ability to resolve them will require firms to change existing communications processes and norms.
Communication
1. Establish a cadence of communication. When you are working side by side with someone, you have the ability to see in real time when some sort of communication is necessary. Spontaneous communication is possible. If the communication takes more or less time than what you had originally planned, that usually is not a problem. Spontaneity and adjusting timing as the situation demands are a norm that can actually lead to a consistent pattern.
The frequency and consistency of communications matter. There is value in having daily stand-up calls or end-of-day debriefs. While the exchange of information in these meetings is important, of equal importance is the work structure it imposes on individual team members. Knowing that the team will have an end-of-day debrief imposes deadlines and accountabilities that keep the project moving forward. Teams that incorporate this structure tend to stay on track.
2. Get tactical. When sharing a conference room with someone, it’s easy to see if they’re spinning their wheels. Supervisors can intervene to “show” and not just “tell.” A remote supervisor loses the ability to see first-hand when a staff member is struggling, and supervisors who are accustomed to merely laying out broad objectives and timelines for their staff may be surprised at the work they get back.
All team members with oversight responsibility should consider the need to be more tactical in how they provide direction to those who work for them, including clients who are providing assistance. Be prepared to provide more details about what is required, a roadmap for how to get there, and frequent check-ins to monitor progress.
3. Don’t overlook training and guidance on new communication technologies. New communication technologies are designed to be simple and intuitive to use, but that does not mean firms should let people learn how to use them via YouTube or trial and error. Eventually, most people learn how to perform the basic functions of video conferencing or collaboration tools, but the quicker you can get everyone at the same level of moderate to advanced proficiency, the faster you can begin to realize the benefits of your investment.
Training must go beyond software training to include the situations where each tool is most appropriate. The problem is that most people tend to choose the technology they are most familiar with, even if it is not best suited for the job. A holistic approach to communications is required where case studies demonstrate the choice and use of the appropriate technology.
Firms should consider creating guidelines and common protocols on the use of each communication type. It may seem like micromanaging, but most people are worn out from the steady diet of curveballs they’ve faced this year. Having firm guidelines will establish much-needed consistency that will not only help morale but also drive efficiency across the firm.
Coordination
Audit staff find it difficult to see how their work fits into the big picture, and this lack of context has a direct impact on team performance. For example, when auditors perform a walkthrough, they may not realize the information they obtain has a direct impact on the team’s ability to identify risk and design audit procedures. Without seeing how their work fits into the overall big picture, the auditor will see their work as an isolated task that must be completed to satisfy the audit requirements.
This lack of connectedness between the work performed by the various team members only increases in a remote auditing environment. For that reason, team leaders should focus on coordinating the functions of the entire team and find ways for them to take the initiative to reach out to each other.
Team leaders will have to find ways to encourage and conduct multidirectional communication between team members. In some instances that may involve finding ways to literally recreate informal communication, for example, by setting aside time during a group call for each person to describe for the group (not just the team leader) the elements of the audit they have been working on and what they have learned — not just about the account balance and audit differences, but broader topics such as the general state of the client’s accounting records or their willingness and ability to complete PBCs on time.
Because individuals won’t have the opportunity to make these connections on their own, the leader must take the initiative to make sure they happen.
Structure, intentionality and leadership
Working together with someone in the same location provides a foundation for building effective communication, collaboration between team members, and a culture of trust and support. Take away this foundation, and the chemistry and group dynamics begin to erode, with lower realization sure to follow.
Replacing that foundation will require more than just adding a new or upgraded communications technology. The subtler elements of the foundation such as the ability to observe and respond to nonverbal cues and emotions have to be replaced.
To do that will require the organization to establish new communications processes and norms. Team leaders must be prepared to model and reinforce these new behaviors, adjust them where necessary, and promote consistency across the entire organization.
At some point, the pandemic will end, but the “new normal” that comes may include a good amount of remote auditing. Now is the perfect time to reflect back on the lessons learned during this past year so we can make changes to continue to improve and build on what we have achieved.
