The COVID-19 pandemic has had a profound impact on the way we work. It forced organisations around the world to quickly adapt to remote working arrangements to ensure business survival. As we reflect on the lessons learned from this challenging time, it is evident that hybrid working, a blend of remote and in-person work, is the only way forward for the audit profession.

Objectives of embracing hybrid working in audit

The objectives and benefits of adopting hybrid working for auditors are many. Firstly, the COVID-19 pandemic forced the audit profession to move into the future sooner. The challenges faced and the changes implemented through use of technology, forced us to prepare for the future rapidly. Secondly, we must consider the impact of hybrid working on employee engagement and client service. Maintaining a high level of engagement and ensuring seamless client service are critical to the success of audit practices. Thirdly, we need to explore the future of auditing and identify the key skills required in this evolving landscape. The rapid advancement of technology and the increasing complexity of business operations call for auditors to possess a diverse range of skills. Finally, we must assess the pros and cons of hybrid working arrangements, implement best practices and determine how to support our teams and build resilience in our audit practices.

Understanding hybrid working in audit

Hybrid working refers to flexible employment arrangements around hours of work, nature of work and location of work. It allows auditors to allocate their working hours or days between the firm's offices, clients' premises, home and remote locations. Hybrid working also involves personalising staff working arrangements to incorporate other roles, commitments and responsibilities. Since the COVID-19 pandemic, there has been an accelerated global acceptance of hybrid working as the "new normal."

For hybrid working to be successful in the audit profession, it requires a culture that empowers and trusts staff. Trust in employees to work independently is essential, along with personalised and flexible working arrangements. Leaders must encourage use of digital tools and technologies that support flexibility, efficiency, communication, audit quality, and client service. Additionally, virtual staff delegation, supervision, training and coaching become essential in a hybrid working environment. Ultimately, the focus should be on team outputs rather than the inputs.

Fostering resilience in hybrid working

Resilience involves anticipating and adapting to uncontrollable events and circumstances, managing ongoing threats and uncertainties and the ability to recover from difficulties and problems. Resilience also requires operational flexibility and robustness, as well as effectively managing client, professional and personal challenges as they arise. By embracing hybrid working, audit practices can build resilience and adaptability into their operations, ensuring they can continue to operate and grow in an ever-changing landscape.

Hyperconnectivity in a hybrid working environment

Hyperconnectivity refers to the state of being constantly connected and accessible through digital communication channels. It enables seamless communication and collaboration regardless of physical location, allowing individuals to stay connected and engaged with their friends, colleagues, clients and stakeholders. In a hybrid working model, hyperconnectivity becomes normal. Utilising a range of communication channels, including email, instant messaging, social media, video conferencing, project management tools and collaboration platforms, enables teams to stay in touch, collaborate, share files and provide instant feedback irrespective of their physical presence.

Lessons from the COVID-19 working experience

The COVID-19 pandemic brought about unprecedented challenges for auditors. Working from home became the new norm, and auditors had to adapt quickly to remote working arrangements. The pandemic created a sense of uncertainty and vulnerability, with staff layoffs, pay cuts and client staff operating from home for extended periods. Virtual meetings became the primary means of communication. Auditors faced new audit issues and had to find innovative ways to obtain audit evidence. The COVID-19 experience highlighted the importance of supporting everyone's well-being, understanding employees’ living arrangements and personal challenges and maintaining effective communication.

Future of audit practices and skills requirements

Post-COVID-19, audit practices are adopting new ways of working and leveraging technology to facilitate audit procedures. Data analytics, AI, and automated procedures are increasingly being used in audits, requiring auditors to possess strong IT systems knowledge and digital skills. Additionally, the auditing landscape is challenging, with greater expectations around ethics, trust, independence, confidentiality and professional conduct. Auditors need to sharpen their professional skills and acquire a more diverse range of skills in IT, technology, science, engineering, and mathematics to meet the demands of clients undergoing digital business transformation.

Observations from the McKinsey Remote Working study

A recent study on remote working highlighted that for technical, accounting, or knowledge-related workers, up to 70% of their time can be effectively worked remotely. Certain tasks, such as research, writing technical materials and most meetings can be done effectively remotely. However, critical activities like staff training, complex problem-solving, collaboration, negotiations, strategy and decision-making, counselling, staff feedback, and onboarding new staff are best done in person. This understanding is crucial when designing hybrid working models for audit practices.

Empowering employees and mitigating risks

Hyperconnectivity can lead to an "always-on" culture, where employees feel pressured to be constantly available and responsive. This can result in work-life imbalance, burnout, and negative impacts on mental well-being. Establishing boundaries between work and home life, addressing isolation and lack of human interaction and managing constant digital communication are key to mitigating these risks. Additionally, audit practices should ensure employees feel connected to the firm’s leaders, culture, clients and colleagues when working remotely.

Developing a Working From Home Policy

To successfully implement hybrid working, audit practices must develop a comprehensive Working From Home Policy. This policy should define the selected work from home model, define expected working hours and include flexibility and periodic reassessment. It should also take into account staff feedback, focus on outputs rather than inputs and emphasise firm leaderships’ trust in employees. Furthermore, the policy should address the causes of employee burnout and strive to create a transparent, respectful, supportive and fair work environment.

Staff retention and development strategies

Retaining and developing talented staff is crucial for the success of audit practices. In addition to implementing hybrid working arrangements, audit firms can adopt other strategies. Rewarding employees who voluntarily undertake upskilling training and enrolling high-performing staff in training programs that lead to promotion and higher remuneration can boost motivation and growth. Integrating learning and skills development into the daily culture of the firm, providing budget relief for training attendance, and incorporating digital and IT skills assessments into the recruitment process are effective retention and development strategies.

The LNP Audit + Assurance Work From Home Policy

The LNP Audit + Assurance Work From Home Policy exemplifies our commitment to flexible and customised remote working arrangements. The policy allows for a tailored remote working arrangement, with employees given the opportunity to work from home for two days a week, while ensuring internet access and contactability. LNP recognises the unique circumstances and responsibilities of our staff and strives to reflect them in customised arrangements, promoting a healthy work-life balance. Furthermore, LNP emphasises the importance of in-person collaboration and knowledge sharing by encouraging attendance at the firm's offices on Fridays for interactive staff training and a whole of Firm catch up. We also ensure our remote team members are involved in all activities. Additionally, LNP Audit + Assurance optimises the use of cloud-based audit and knowledge sharing tools, such as Caseware and Dropbox, to facilitate seamless collaboration and information exchange among team members, regardless of their physical location. These policies demonstrate our commitment to fostering resilience, hyperconnectivity, and effective client service in the new era of hybrid working in audit.

Embracing the future of audit

Embracing hybrid working in audit is not only about adapting to the post-pandemic world but also about building resilience, managing hyperconnectivity and acquiring the skills required for the future. The COVID-19 pandemic has demonstrated the feasibility and benefits of remote and flexible working arrangements. By customising working arrangements for each team member, emphasising and building digital skills and embedding coaching, training and upskilling into the culture of audit practices, firms can position themselves for success in the evolving audit landscape. Auditors have always been mobile and agile. The future of audit is hybrid, resilient and hyperconnected. It is time to embrace the future.