Can a charity have a remote audit? The benefits of a more flexible approach

Yes. A charity can have a remote audit, or a hybrid audit that combines remote work with a visit to your premises. The auditing standards are the same either way, and most of the evidence a charity audit relies on is already held digitally.

For many charities, preparing for the annual audit places considerable pressure on already stretched finance teams. Gathering financial records, responding to auditors’ queries and coordinating input from trustees and colleagues can be time-consuming, particularly when staff work part-time, remotely or across multiple locations. The sector is large and spread out: the 2021 State of the Sector report counted 17,494 voluntary organisations, community groups and social enterprises in Greater Manchester, and the 2023 Cheshire and Merseyside report counted over 19,500.

In this article, we explain how remote charity audits work, the benefits for finance teams and trustees, and how to decide whether a fully remote or hybrid approach is right for your organisation.

What is a remote charity audit?

A remote audit is an independent financial audit conducted primarily through digital systems, secure document-sharing platforms and online meetings, rather than auditors working at your premises.

The underlying audit requirements remain unchanged. Auditors must still obtain sufficient appropriate evidence to support their opinion on the financial statements, in accordance with the applicable auditing standards. The difference is how that evidence is gathered, reviewed and discussed.

For example, rather than providing paper files or arranging office space for an audit team, your charity can upload accounting records, supporting documents and other information through a secure online platform. Questions can be answered electronically, progress can be monitored throughout the process, and meetings with management and trustees can take place by video call.

Where physical inspection or face-to-face discussions are necessary, these can be incorporated into a hybrid audit.

What are the benefits of a remote audit for charities?

1. Less disruption to your finance team

Charity finance teams are often responsible for far more than preparing the annual accounts. Payroll, budgeting, grant reporting, management information and day-to-day financial administration all compete for their time. Hosting an audit team on site can add another layer of pressure, particularly where staffing resources are limited.

A remote audit allows information to be provided and queries to be answered in a more structured way, helping your team manage audit requirements alongside its existing responsibilities. There is no need to find dedicated office space for auditors or have staff continuously available to answer questions throughout the working day. The audit work itself is the same, but the process can be organised around your team’s availability, reducing unnecessary interruptions.

2. Greater flexibility for part-time staff and volunteer trustees

Many charities operate with flexible working arrangements, part-time finance personnel and trustees who balance their voluntary responsibilities with other professional commitments. Traditional on-site audits can make coordinating these individuals more difficult.

With a remote approach, information requests can be allocated to the appropriate person and completed when they are available. For example, your finance manager might provide accounting records, while a colleague in fundraising uploads grant agreements and an HR representative supplies payroll information. Trustees can also attend planning or completion meetings remotely, making it easier to involve the right people without requiring everyone to travel to the same location.

3. Better organisation and visibility throughout the audit

One of the frustrations charities can experience during an audit is keeping track of outstanding requests. When documents and questions are exchanged through lengthy email chains, it can become difficult to establish what has been provided, what remains outstanding and who is responsible for responding.

A dedicated online audit platform brings these activities together in one place. Your team can see which requests are outstanding, assign responsibilities and monitor progress throughout the audit. This visibility is particularly valuable when working towards trustee meetings, finance committee deadlines and statutory reporting requirements. It also creates a clearer record of information provided, which can help maintain continuity when staff change roles or take leave.

4. Improved planning and fewer last-minute pressures

For charities, the annual audit often coincides with other important activities, including preparing the trustees’ annual report, finalising budgets and meeting funder reporting requirements. Leaving audit preparation until after the financial year end can concentrate a considerable amount of work into a relatively short period.

When information requests are issued digitally, it is easier to begin planning and gathering information earlier. Agreeing responsibilities and a timetable in advance helps your finance team understand what will be needed and when, rather than facing a large volume of unexpected requests during fieldwork. Some procedures must wait until after the year end, but earlier planning can make the overall process more manageable.

5. Secure sharing of sensitive financial information

Charities may hold sensitive information relating to employees, donors, beneficiaries and the services they provide, and protecting it is an important consideration when sharing records with external auditors. Rather than circulating numerous documents as email attachments, a secure online audit platform provides a more controlled way of transferring and managing information, with a central record of requests and responses.

It is also good practice to agree what information is actually needed for audit purposes, taking account of the UK GDPR data minimisation principle. For example, where beneficiary support payments are being reviewed, it is worth discussing whether identifying details can be removed without affecting the quality of the audit evidence. The objective is to obtain the information needed for a robust audit while avoiding unnecessary disclosure of personal data.

6. Reduced travel and environmental impact

Many charities operate across multiple locations, while others have made commitments to reducing their environmental footprint. Remote auditing can reduce the need for repeated journeys by audit teams and charity personnel.

It can also make geographical location less of a barrier when choosing an auditor. For charities operating across the North West and beyond, this means accessing specialist charity audit expertise without necessarily requiring auditors to be physically present throughout the engagement. If you are weighing up whether it is time to review your appointment, see “how long a charity can keep the same auditor”

Is a remote charity audit as thorough as an on-site audit?

One of the most important questions for trustees is whether a remote audit provides the same level of assurance as a traditional audit. The standards governing the audit do not change simply because the work is performed remotely.

Under ISA (UK) 500, auditors are required to obtain sufficient appropriate audit evidence to support their conclusions. This applies whether the audit is conducted remotely, on site or through a combination of both. Remote auditing does not mean accepting less evidence or applying less professional scepticism. Auditors must still assess financial reporting risks, test relevant transactions and balances, evaluate supporting evidence and consider whether the financial statements present a true and fair view.

The methods used to obtain evidence may need to be adapted, however. ICAEW guidance notes that observation, inspection, inquiry and analytical procedures do not require auditors to be on site, but that auditors need to consider how to compensate in certain areas, such as attending a stock count, inspecting original documents or verifying physical assets. In practice, that can mean obtaining confirmations directly from third parties, corroborating documents against other sources, asking for originals where an item is significant, or carrying out additional procedures to establish the reliability of digital documents.

Where remote procedures cannot provide sufficient appropriate evidence, an on-site visit or another suitable approach may be necessary. Remote auditing changes the way an audit is delivered, not the level of assurance it is designed to provide.

When might a hybrid charity audit be more appropriate?

Although many audit procedures can be completed remotely, a fully remote approach will not be suitable for every charity. An on-site visit may be beneficial where an organisation:

• holds significant physical stock or assets that require inspection or observation;
• operates charity shops, residential facilities or multiple service locations where particular audit procedures are best performed in person;
• maintains important financial records in paper form;
• has recently changed its accounting systems or experienced significant changes within its finance team; or
• is appointing a new auditor and would benefit from more extensive face-to-face discussions.

For these organisations, a hybrid audit can offer the best of both approaches. Routine information gathering and testing can be undertaken remotely, while specific procedures and meetings are carried out on site where appropriate.

How UHY Williamson & Croft delivers remote charity audits

A good audit depends on more than completing testing efficiently. It also depends on understanding how a charity operates and keeping lines of communication open with management and trustees. For that reason, we agree the delivery approach with each client rather than assuming that fully remote working is always the best option.

A delivery approach agreed from the outset. We begin by discussing your charity’s operations, accounting systems, reporting timetable and preferences. Whether you would prefer a fully remote audit, regular on-site contact or a hybrid arrangement, we agree a practical approach before the audit starts.

Inflo Collaborate for information requests. We use Inflo Collaborate to manage information requests and document sharing throughout the audit. Your team can upload records securely, respond to queries, allocate responsibilities and monitor outstanding requests, and we can track the progress of the audit in real time. Inflo holds ISO 27001 certification and operates in line with GDPR principles. Training is available for team members who would like support using the system.

Audit Toolbar for financial data. We also use Audit Toolbar, a Microsoft Excel add-in, to process financial information and support audit testing. It converts ledger and trial balance exports into consistent formats, selects samples using recognised sampling methods and ranks journal entries against risk criteria, so our auditors can focus on transactions that need closer attention. It also reduces some of the manual preparation that might otherwise fall to your finance team. Where charities use cloud accounting software such as Xero, digital access to financial records further supports remote working.

Planning before fieldwork. Before the main fieldwork begins, we carry out planning and risk assessment, agree responsibilities, identify key reporting issues and issue information requests in good time. A partner is involved at key stages of the engagement, so significant technical matters are addressed promptly.

Regular communication and a clear report. Throughout the audit, we hold regular progress meetings and discuss findings as they arise. At completion, we arrange a clearance meeting to consider the draft financial statements, proposed adjustments and significant audit matters. Our Audit Findings Report uses a red, amber and green rating so trustees can distinguish matters requiring action from those that are advisory. We aim to circulate draft reports before relevant meetings, giving management, finance committees and trustees time to review the findings.

How can your charity prepare for a remote audit?

Preparing for a remote audit does not necessarily require significant changes to your existing systems. However, a few practical steps can help:

• Nominate a main point of contact. Identify who will coordinate the audit and who is responsible for providing information from different departments.
• Organise key financial records. Ensure that documents such as bank reconciliations, grant agreements, trustee minutes and supporting accounting records are readily accessible.
• Consider document security. Identify records containing sensitive personal information and discuss any necessary safeguards with your auditors.
• Plan around trustee availability. Establish suitable dates for planning meetings, audit clearance discussions and the presentation of findings.
• Discuss your preferred working arrangements. Explain whether your team would benefit most from a remote, hybrid or on-site approach.

Good preparation and communication can make a significant difference to how smoothly the audit progresses, regardless of where the work is performed.

Talking to us about your charity’s audit

Your annual audit should give trustees and stakeholders confidence in your charity’s financial reporting, while being delivered in a way that recognises the demands on your organisation. For many charities, remote and hybrid auditing makes the process better organised and less disruptive without lowering the standard of evidence required.

Our audit and assurance team works with charities and not-for-profit organisations from our offices in Manchester and Liverpool. Whether you are considering changing your charity’s auditors, reviewing your current audit arrangements or want to understand whether remote auditing would work for you, contact us to arrange an initial conversation.