Revolutionizing EBP Audits: How Cloud-Based Solutions Are Changing the Game
By Sunmi Okoma
The terms “effectiveness” and “efficiency” are both often used to convey productivity, efficacy, over-achievement or whatever adjective fits the box at any given time. In reality, these words have two very different meanings.
Effectiveness is about carrying out actions that get you closer to your goals — doing the right things. Efficiency is about performing a given task in the most economical manner possible — doing things right.
But being efficient without regard to effectiveness is frequently the default mode of human nature, and this often influences our actions. Therefore, finding the right balance between effectiveness and efficiency can most times feel like a double whammy, more so for an auditor performing employee benefit plan (EBP) audits.
As an auditor, you are constantly saddled with the responsibility of handling your workload effectively during an EBP audit and the need to constantly deliver value to your clients efficiently. How can you accomplish both when dealing with tight deadlines, clunky manual tools, constantly changing regulations and, for many, a shortage of talent?
In this article, we will explore the advantages and benefits of using a cloud-based EBP audit solution to overcome these challenges and make the auditing process more efficient, utilizing features such as guided methodology, automated workflows, improved data security for reduced costs and other benefits.
Challenges facing audit and assurance firms
Often, what makes an EBP audit weightier than others is the pressure to serve the people it is designed to help. Knowing that every potential misstatement has a multiplier effect that could adversely affect the life of a real person adds to the strain of ensuring the audit’s accuracy.
Unlike other audits, EBP audits are unique and sensitive by nature. They are an essential part of ensuring that companies comply with regulatory requirements and protect the retirement assets of their employees. It is a critical aspect of ensuring compliance and fiduciary responsibility for plan sponsors.
However, performing EBP audits can be a complex and challenging process for audit and assurance firms. Auditors must review complex plan documents, examine plan operations and controls and perform testing on the plan's financial statements.
Changes to regulations and accounting standards, as well as increased regulatory scrutiny, have made the EBP audit process even more complicated. This complexity, combined with the tight deadlines for completing EBP audits, can put considerable pressure on audit and assurance firms.
Additionally, the sensitive nature of the data involved in these audits requires a high level of security to ensure the information is protected from unauthorized access or breaches.
Cloud-based solutions for EBP audits
For firms that specialize in or perform EBP audits as part of their overall audit and assurance practice, the process is often arduous. It involves gathering and analyzing data from various sources, which can be a tedious and cumbersome task. Staff spend long hours at the office, manually poring over spreadsheets and paperwork.
To make matters worse, the audit team has to ensure its work is not under-audited to ensure it passes the peer reviews flawlessly. This makes it difficult for an audit team to keep up and often leads to over-auditing, resulting in inefficiencies.
Cloud-based EBP audit solutions can be a huge help to such firms, allowing them to overcome many of these types of challenges associated with traditional EBP audits.
Caseware’s OnPoint EBP alerts auditors to key areas of focus, eliminating the burden of repetitive processess, making it easier, faster and more efficient. When working in the cloud, auditors can equally access audit software and tools from anywhere, at any time, all in real time. This means they can work remotely, which is especially valuable in today's world, where remote work has become more common in the wake of the COVID-19 pandemic.
Let’s look at some of these benefits in more detail.
Benefits of cloud-based EBP audit solutions
Increased risk efficiency and effectiveness
Cloud-based EBP audit solutions provide streamlined, automated workflows and tools, making the audit process more efficient by simplifying such tasks as risk assessment, testing and reporting. Auditors can access all the tools they need from one centralized platform, eliminating the need to switch between multiple applications and thereby reducing the risk of errors.
Automation features, such as data extraction and report generation, help save time, increase productivity, improve staff experience and boost talent attraction and retention efforts.
Enhanced audit engagement quality
Maintaining high-quality audit engagements is crucial in conducting a successful EBP audit. Superior audits provide assurance to stakeholders that the financial statements of the employee benefit plan are free from material misstatements and are in compliance with relevant accounting standards and regulations.
In addition, a cloud-based EBP audit can help to identify and address potential risks and issues in a timely manner, reducing the likelihood of errors or fraud. This can ultimately increase the confidence of plan sponsors and participants in the accuracy and reliability of the financial statements and enhance the reputation of the auditing firm.
Moreover, by maintaining a focus on quality, audit engagements can help to foster long-term relationships with clients and build a strong reputation in the market for providing high-quality EBP audit services.
Improved data security
EBP audits involve sensitive financial and personal information. Cloud-based solutions provide a robust level of security for protection of sensitive data, including encryption and multi-factor authentication. This helps ensure the data is stored securely in the cloud, protected from unauthorized access or breaches.
Cloud-based solutions also offer regular software updates, backups and disaster recovery options, which can help protect against data loss in the event of a disaster or outage. With a cloud-based EBP audit solution, the risk of data breaches and cyberattacks is significantly reduced.
With sensitive employee information at stake, clients can enjoy peace of mind knowing their data is secure.
Traditional EBP audits can be costly, especially when a firm has multiple technology tools in use. With cloud-based solutions, there is no need for expensive hardware or software installations. They offer flexible pricing models that allow firms to only pay for what they need, which helps reduce the costs associated with EBP audits.
This makes it more affordable for firms of all sizes, reducing overhead costs and improving profitability.
Caseware’s OnPoint EBP is a fully integrated, secure, cloud-based EBP audit application with built-in guided AICPA methodology and intelligent workflow. It streamlines client collaboration and automates draft financial statements and disclosures. Also included are standardized engagement templates, review tools and risk-alert indicators for expert guidance and professional standards.
OnPoint EBP offers a collaboration-focused workflow for improved accuracy and increased efficiency that saves you time and money on every engagement.
Discover how you can make your practice more efficient with an intelligent, cloud-based solution like Caseware’s OnPoint Audit & Assurance Suite.