The Remote Audit Experience
The Remote Audit Experience
July 15, 2020
Due to recent global events, NICExperts has adopted remote practices only, meaning in-person meetings, office stays, and air travel are currently “out of scope” for Canadian audits. Until such time as municipal, local, federal, and international regulation and guidance allows, our preferred method of in-person DA audit and operational consultation has been sidelined.
While in-person DA audit and operational consultation is preferred by many, the NICExperts network of independent consultants always worked from home (WFH) and was already established as a remote business which provided us the immediate opportunity and capability during the pandemic to assist others new to this type of work. Almost immediately after WFH orders were communicated, insurers and regulators confirmed independent audit was required to maintain existing contractual relationships to keep current DA agreements intact.
Since March of 2020, NICExperts has worked with dozens of agencies, and together we emphasized creative, flexible, and customized ways to insurer audit schedules ensuring minimal were deferred to a normally strained Q3/Q4 schedule.
We have been asked about the remote audit experience. Here are our early thoughts and comments:
What does Remote DA Audit look like?
• Complete scopes continue to be the norm using a variety of video / tele-conference platforms, and external system accesses permissioned to allow audit specialists to see exactly what is required.
• Auditors must be flexible to agency schedules; after all, agencies are busy taking care of their clients and are the public face of the insurance industry. It is an important time to focus on others.
• Early, clear, consistent, and continuous communication with all stakeholders has allowed completion of approximately 30 remote audits so far.
Does Remote DA Audit present any opportunities to stakeholders over on-site visits?
• Yes! Communication is the cornerstone – by involving as many individuals likely to be needed over the audit period, interviews can be scheduled in advance to balance the needs for front-line staff who retain other obligations throughout the audit.
• Pre-scheduling interviews allows auditors to ‘meet’ individuals in multiple offices or regions across time zones, something that adds days to on-site visits.
• Additional stakeholders can be considered as part of the audit communication to improve audit efficiency and assist with recommendation discussions.
What are the drawbacks of Remote DA Audit?
• The most common remote audit problem cited is use of physical underwriting or claims files which is seen to limit file testing. However, the pandemic has seen many agencies now fast-tracking remote file capabilities and what better time to include audit teams with decades of electronic filing experience to comment!
• The second most common issue is there is no available or desired audit access to company systems. Scanning information to create electronic ‘audit’ files can resolve this and needs to include pre-audit preparation time well in advance of the scheduled audit date.
• What previously could be achieved in two days typically takes one week as the audit is spread out to accommodate competing schedules of those involved in the audit. All of us are adapting to the remote world and many agencies report increases of their own time to complete regular work duties. Balancing these to minimize the effect of the remote audit is incumbent on the audit firm where possible.
Are remote audits the way of the future?
• Remote audits are great where locations are remote, systems in use are single-source, and DA processes are documented with peer review and audit functions embedded within. Conversely, sufficient technology platforms must be available to efficiently complete audits, and remote locations in Canada can mean less consistent internet access.
• The ability to accommodate remote audits is seen by many insurers as part of a successful implementation of business continuity planning.
• Videoconference permits similar audit interview capabilities and interactions when internet connections are good, but are not a replacement for good, old fashioned face-to-face discussions (in our opinion)!
While we look forward to the day we can visit your office again, we are prepared to support all stakeholders in the DA market until the best time to do so arrives.
Keep well friends.