The Importance of Embracing Virtual COPAS Protocols Post-COVID-19
Protecting employees and vendors, as well as auditors and auditees, is more critical than ever as COVID-19 continues to spread. Virtual joint venture audits (audits) for joint interest billings (JIB) and revenue in the oil and gas industry have been happening for the past two decades due to advances in technological capabilities, but some companies have embraced the virtual world faster and better than others. On-site audit capabilities are limited today due to sanitation issues, air travel challenges, and government restrictions. Business transactions continue and audits still need to be performed, so embracing the virtual audit becomes more cost-effective and sustainable in these uncertain times.
Employees have been working virtually on and off since March 2020, and companies have adjusted processes and embraced technologies to facilitate these accommodations. Companies that weren’t prepared are quickly getting up to speed with the various technologies needed for a virtual work life. IT system controls and access have been established to help teams work remotely and safely. With lower costs for technology and more capabilities to remote into systems, virtual work is continuing today, even while the economy is reopening, due to the ongoing uncertainty of outbreaks and changing governmental restrictions as outbreaks occur.
Since the late 1990s, virtual audit protocols have been published by the Council of Petroleum Accountants Societies (COPAS), the organization known as the source for oil and gas accounting. COPAS protocols for JIB and revenue audits have been followed in the upstream oil and gas industry for years. Some companies have allowed for virtual audits, while other companies continue to facilitate on-site audits. In the past, the argument for on-site audits related to technological restrictions and lack of imaged documents. Also, auditees believed the nature of an on-site audit allowed for more control by the host auditee regarding access to documentation and security concerns. The reality is that technological uses and capabilities now allow for restrictions and limitations based on the user and access privileges, not based on where the person is physically located, be it virtually or on site.
The advantages to virtual audits continue to outweigh any perceived disadvantages to both the auditee and the auditor. Safer at-home measures, travel restrictions, and limited physical interactions are beneficial for all parties involved. Audit protocols are available, and virtual audits are becoming more common every day. Embracing the technological tools available to auditees and auditors enables timely and more cost-effective engagements while allowing organizations to continue meeting their business needs today and in the future.
For more information, reach out to your BKD Trusted Advisor™ or submit the Contact Us form below.