Role of On-site and Remote Audits

Jun. 10, 2024

Role of On-site and Remote Audits

Whenever a new general technology is introduced to the world, it often impacts multiple industries. For instance, the recent AI wave has significantly influenced many sectors.

However, AI is not the only one that transforms the world. Remote work and operations, facilitated by various new technologies, have also revolutionized numerous industries, especially after the pandemic. One notable example is the auditing industry. While onsite audits were traditionally preferred by companies, the pandemic prompted a shift towards remote audits. 

This shift has sparked a debate on which method is better. So, let's explore these two types of audits in our blog to understand their roles and benefits. 

What is an On-site Audit?

As its name refers, on-site audits are where auditors physically visit the organization. It is the traditional method of auditing an organization, but with access to new technology, it has become more sophisticated. In an on-site audit, the auditors can directly interact with the staff and operations at the company. It gives auditors first-hand experience, which is good for an unfiltered audit. Back then, when technological constraints existed, and the tech wasn't developed as much as today, on-site audits were the only option, no matter what industry you belonged to. However, today, there are many industries where on-site auditing is still preferred, such as the manufacturing industry. However, other industries may not need an on-site audit; in some cases, combining it with a remote audit is a better option.  

What is a Remote Audit?

Remote audits, on the other hand, are relatively new as they started to appear when the world got its hands on the new technologies. As its name suggests, remote audits don't need the auditors to visit the organization physically. The audit is completed by the auditor firm while in contact with the organization and must be audited digitally.

For instance, the company's staff has to be screened; this will be done through software like Zoom and Google Meet. Similarly, the company's documents are also assessed digitally. Remote audits are a great way to audit a company that doesn't have a lot of offline operations like manufacturing. So, online audits are undoubtedly the best option if an organization keeps all its records in digital format and most operations are online or digital. For example, if a digital marketing company needs to be audited, a remote audit works well and is an economical option.  

Benefits of On-site and Remote Audits

There is no doubt that these two methods exist in simultaneous space because they each have their benefits. So, let's now look at the benefits of these two auditing methods.  

On-site Audit  

1. In-depth Examination  

One of the best benefits of on-site audits is that they allow for an in-depth examination of the organization's processes, operations, and assets. This is one reason why on-site audits have not yet lost their significance in the auditing industry.  

2. Enhanced Communication  

Just like it allows for the physical assessment of the company's assets, processes, and operations, it also lets the auditors interact with the employees face to face. Since interacting with the employees is an important part of the audit, doing it face-to-face makes a real difference. It enhances the quality of the communication.  

3. Immediate Feedback  

While a report is indeed created after the completion of the auditing, the auditors mostly continue giving their feedback in between the auditing. The auditors mostly address many minor things, which may not be as significant to include in the report, but letting the owner or any other employee know about them can be good for the organization.  

Remote Audits  

1. Cost Efficiency  

Remote auditing is cost-effective, making it accessible to even small firms. It is comparatively more affordable to get an Audit done remotely than the traditional on-site one. You don't have to pay for the logistics and other expenses, which are usually included in on-site audits.  

2. Access to Expertise  

With the on-site audit, you must choose the auditor firm within your range, like one in your city. This leaves you with just a few options to choose from. Hence, sometimes, getting the best or even better one may be impossible. However, with remote audits, you can get access to a pool of auditing companies with no boundaries. So, if you don't find a firm compatible with your city, you can look for one in another region.  

3. Adaptability  

From the very recent POV, adaptability has become necessary for auditing. For a long period of time, on-site auditing wasn't possible as it required physical inception. However, remote audits adapted to the situation and enabled the companies to be audited and saved from getting into huge blunders.  

On-site vs Remote Audits: Which one should you choose? 

If traditional on-site audits weren't good enough, then remote audits must have completely lost their significance. But they didn't. On the other hand, if on-site audits were perfect, then remote audits should never have existed.  
So, there's no method that replaces the other, but both are good due to their uniqueness. Hence, when it comes to choosing one, you should consider your requirements.  
Let's take two simple examples to understand the role of on-site and remote audits. Let's say there's a company that has an office in Delhi. The company manufactures CCTV cameras and keeps all the details in manual format. So, they use traditional registers for accounts management and other documentation work. The company wants its factory and office audited. 
So, if you look at these circumstances, the company has to choose an on-site audit and not a remote one. The remote audit requires a digital format for documentation, which, in this company's case, is unavailable. So, converting them into digital format may not be a convenient option.  
Now, let's take another example of a digital marketing firm. They are based in a small town, and their employees work remotely. So, they always maintained their documentation digitally. Now, looking at these circumstances, there's no doubt that they should opt for remote audits.  
Not only is their digital documentation easier to audit online, but their remotely working employees are also hard to interview on-site. Also, since they are based in a small town, they may not have access to a good audit firm for on-site audits.  

Hybrid Audit - Combining the On-site and Remote Audits 

Not only are these audits great individually, but today, they can be combined to get even better results. Let's also understand hybrid audits with a simple example. Let's say there's a company that maintains all tenor documentation digitally in the tenor office.  

However, they also have a factory where many operations and processes are carried out. Hence, their office can be audited remotely, but their factory is better if it is audited on-site. The on-site audit will allow for a deeper assessment of the processes and operations, which is not a good option if done remotely. So, a hybrid audit comes with the ability to combine both on-site and remote audits.  

Wrapping Up  

In conclusion, at QDegrees both onsite and remote audits have their own advantages. Onsite audits provide an in-depth assessment opportunity, allowing auditors to observe operations firsthand and interact directly with staff. Remote audits, on the other hand, are more affordable and offer flexibility, enabling access to a wide variety of firms for the audit process.  
If you are looking for a solution that combines the strengths of both methods, hybrid audits are an excellent option. Hybrid audits integrate the thoroughness of onsite audits with the convenience and cost-effectiveness of remote audits, providing a balanced and comprehensive auditing approach.