Remote risk in a remote world

Remote is the new normal. Same as "smart"phones are just called phones, remote colleagues are just going to be called colleagues. And now there's even remote executive, with the recent hire of a Chief Remote Officer making headlines today.

At the beginning of the pandemic, we talked about when we go "back to work" - as if prior to the pandemic we weren’t already working connected. As a tech leader who used to travel often between cities around the world waiting in airport lounges, I didn't get frustrated. I felt my "HQ" was always abroad; wherever I could access my email and Slack was my office for that day. This is not a widely accepted reality and business leaders need to accept that the safety bubble of a physical office is gone.

This means every worker now has to be protected from home with the same level of security they had in the office. Auditing, investigating, and interviewing processes need new security checks for tasks involving expense approvals, budgets, and all the sensitive financial data handled on a daily basis. I feel privileged at Mindbridge because we’ve been providing secured assistance for financial risk assessment remotely for a while now, and from day 1 we’ve had an extremely positive attitude to risk. Even if this meant our sales team had fewer leads than other start-ups, reducing risk was well worth it. 

Unfortunately (or fortunately) for those employees who’ve been enjoying more time at home with their partners and children, going back to the office will not be the same as before. The pandemic showed us working remotely is possible over longer periods. The problem faced by most companies is less oversight. 

According to a recent article from the Washington Post,  there is another crisis outside the pandemic ahead - a surge in fraud-related criminal activity. By March 31st, American consumers had already reported a combined loss of nearly $4.8 million in coronavirus-related fraud to the Federal Trade Commission. In the UK and US, the accounting industry is seeing the effects of the pandemic on the books of organizations, leading the ACFE to warn about the pandemic of fraud.

Managing remote risk in a remote world is now a key topic in all boardrooms, but I am not sure the business community has fully embraced what that means. In my opinion, this means business leaders can no longer rely solely on employees to ensure human activity is within compliance. In an article I wrote for Forbes Council on how AI can protect your business, I mentioned a quote from Bernard Marr that “without effective leadership the best AI will not be put to use”. This means your policies, compliance teams, and security teams will need to adjust their approach to accommodate remote work, a concept that many tech startups are familiar with already. 

Do not forget about your external auditors, they need to be at the cutting edge of technology, and explain to you how they made investments in being tech enabled. They need to know how to do remote auditing safely, not asking you to send your companies financials through unsecured emails or worse, via USB drives via mail unencrypted (yes, it happens more often than you realize).

If you are an accounting firm, you need to brace for negligence risk. The Financial Reporting Council (“FRC”) was alive to these concerns at the start of lockdown in March 2020 commenting that: “Some companies and auditors are also facing practical difficulties in preparing accounts and carrying out audits. The FRC expects this will affect the way in which audit firms carry out their audit of those companies, given restrictions on travel, meetings and access to company sites in some jurisdictions...” Both sets of guidance are essential reading for auditors wanting practical solutions to mitigate the risks which may arise carrying out an audit during Covid-19. 

And do not forget about your external auditors, who need to be at the cutting edge of technology and have made investments in a data-first driven ideology. These partners need to know how to perform remote auditing safely by not asking clients to send sensitive companies financials through unsecured emails, or worse via USB drives sent through the post office (yes, it happens more often than you realize).

If you are an accounting firm, you need to brace for negligence risk. The Financial Reporting Council (“FRC”) was alive to these concerns at the start of lockdown in March 2020 commenting that “Some companies and auditors are also facing practical difficulties in preparing accounts and carrying out audits. The FRC expects this will affect the way in which audit firms carry out their audit of those companies, given restrictions on travel, meetings and access to company sites in some jurisdictions.” Both sets of guidance are essential warning auditors to mitigate the risks that may arise carrying out an audit during Covid-19. 

This new normal is here to stay, and CEOs, CFOs, and Managing or Audit partners simply cannot afford to underestimate the risk inherent to the situation we live in, especially ahead of accounting’s busy season. Technologies in cyber risk, fraud detection, and artificial intelligence are now very affordable, reliable, and built for companies to operate remotely. 

I applaud the hire of Chief Remote Officers, but the safety and security of the business and it’s employees are the responsibility of all executives. So even if a business can’t afford a Chief Remote Officer, it should fall on that organization's leaders to step up and find the proper solutions for these risks. Even in my own network, I’ve seen small accounting firm leaders implement new strategies and softwares to keep their firm safe and working remotely. In teams as small as 5 people, they’ve switched their technology providers to safe cloud-based tools to ensure they don't create risk for their clients.

In my next post, I will publish a list of tips on how to maximize business continuity and cyber security, as well as a handful of selected apps I’ve had personal experience and have helped me get to where I am today. In the meantime, if you’d think your business could benefit from your books and internal controls being assessed by experts, I can refer you to a list of trusted service providers that are already using AI to do this from the UK to Australia, as well as a few cyber risk expert resources and links.

I hope you all stay safe personally and in your business. I look forward to seeing you all in 2021!