Virtual Data Rooms for Financial Audits

May 27, 2010 - by Joel Lessem

If anyone  has ever had the pleasure of conducting a financial audit he/she is all too aware that it’s a time consuming process.  The audit process has four main stages:

1. Planning & Risk Assessment:  Are there other factors that could have a material impact on the company and are not evident in the financial reports?  What are the risks of an inaccurate audit opinion?
2. Internal Controls Testing: Are the financial controls rigorous, consistent and accurate?
3. Substantive Procedures: Detailed review of financial information.
4. Finalization:   Create the audit report.

As one might imagine, auditors are typically encamped in the audited company’s offices for weeks, pouring over financial information. It’s inconvenient for the office and it’s inconvenient for the auditor.

Increasingly, Firmex corporate clients are using their unlimited use virtual data room to share financial information with their auditors, setting up all their folders and documents online.

With 256 bit data encryption and multiple firewalls, online document rooms are far more secure than papers scattered around the office.  The auditors log in, review the documents and send in requests for additional information, reducing the amount of time they spend travelling and in the company’s offices.  Using a virtual data room for audits is far more efficient and convenient for all parties.

Financial audits are perhaps most popular when it comes to adopting a virtual data room.  However, at Firmex we also see clients use the system for technology audits, infrastructure audits, regulatory audits and independent review boards (IDB), reviewing proposed clinical trials.  In all of these processes, corporations are finding greater efficiencies by sharing their documents securely online.