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Flight of the Drones: A Remote Audit Support

Written by : Michael Hezkia

Designed by : Muhammad Farhan Fajarmukti

The appearance of the worldwide pandemic, COVID-19, has caused a lot of discontinuation on the usual daily activities. One of those activities is the process of auditing. Audits which are usually done physically are forced to change and adapt to the new normal and implementation of physical distancing. This is where the term remote audit comes in.

Remote audit or virtual audit is a method of conducting an audit remotely. Interestingly enough, remote audit has been put in practice several years before the whole COVID-19 situation even started. This method of auditing is described in ISO 19011:2018 Annex A1. This method was first stated to help auditors do their work when they are unable to be present on site due to safety constraints or other restrictions. Some examples of these restrictions are warehouses that are on renovation, explosive testing sites, travel restricted countries, and other scenarios including the ongoing pandemic.

Remote audits are done by utilizing information and communication technologies (ICT). Auditors can request access to the client’s digital database and documents. Other than that, auditors can also use a video conference software to interview their client. But there is a problem that still persists. How do auditors check out their client’s site without physical presence? Well, auditors can use a whole bunch of tools to help them fulfill this need. One of them is by piloting a drone.

Drones can be piloted by an individual to help with the auditing process. By using a drone, the auditor can survey the client’s site to observe their inventory. Using a drone might sound like a weird idea. But it turns out that PricewaterhouseCoopers (PwC) and Ernst & Young, two of the big four accounting firms, have used drones on their auditing process. PwC used drones to assist the stock count audit of coals for a German energy firm in the UK called RWE. While EY used drones to assist with the stock count audit for the inventory of trucks in various yards (Andrew Morga, EY Partner, 2019). These pictures and videos that are collected by the drones are then stitched together to form a single and detailed overhead image of the area. This image allowed accounting firms to do an inventory count of their client’s site.

Doing a remote audit by using drones might not be able to replace doing a  direct physical audit. Only observing videos to do an inventory count might limit the ability to do a thorough quality check. Other than that, remote audit relies on network and huge storage capabilities which are susceptible to data corruption risk. But taking the COVID-19 pandemic and the never-ending development of ICT into account. Using drones as an innovation to support auditors in doing remote audits is a decent alternative in this current difficult time.

References:

Consultancy.uk (2019). PwC uses Drones to Assist Audit in Global First. https://www.consultancy.uk/news/19829/pwc-uses-drone-to-assist-audit-in-global-first#:~:text=Big%20Four%20firm%20PwC%20has,by%20more%20than%20three%20hours.

Ethan Rotberg (2019). Eye in the Sky: How Drones are Assisting with Audits. https://www.cpacanada.ca/en/news/innovation/2019-02-12-audit-drones

International Organization for Standardization (ISO) and International Accreditation Forum (IAD) (2020). ISO 9001 Auditing Practices Group Guidance on: Remote Audits. https://committee.iso.org/files/live/sites/tc176/files/documents/ISO%209001%20Auditing%20Practices%20Group%20docs/Auditing%20General/APG-Remote_Audits.pdf

Luc Rinaldi (2019). Faster. Cheaper. Safer. Better? Welcome to Auditing in the Drone Age. https://www.cpacanada.ca/en/news/pivot-magazine/2019-09-03-andrew-morgan-drone-auditing

Quality.org (2020). The Evolution of Remote Audits. https://www.quality.org/knowledge/evolution-remote-audits