6 Tips for Using a Virtual Data Room for A Financial Audit

Financial audits are standard for businesses as they grow and accumulate a strong wealth base. Compiling and distributing the necessary documents for auditors to review can be challenging. Virtual Data Rooms can minimize the costs and time spent and keep your files secure.

Here are the top six tips for getting the most out of VDRs during a financial audit:

1. Use Storage and Organization

Auditors can evaluate records much more quickly when your files are well-organized. A VDR provides the perfect location to store all your confidential documents and organize them properly and safely. There is no need for massive volumes of files and folders in a physical area or a messy digital storage system.

Arrange your documents according to departments and other relevant parameters for easy access. The data room helps by automatically numbering your files and folders. Users can also find documents by searching a keyword or title. With all your documents in one place, auditors can complete their work more quickly, saving time and money.

2. Use Secure Sharing

An audit involves sharing of sensitive documents and information between auditors and businesses. This sensitive information can be kept safe and confidential through the use of a VDR. Sharing files using VDRs mitigates many issues of traditional documents exchange because it includes the following features:

Share with Many People 

A virtual deal room lets you share one repository of files with several audit companies. You no longer have to make countless copies of each one like in the past. Simply select the people or groups you want to see a specific document and grant them access.

Keep Your Documents Safe

Auditors often work as a team, with only the senior auditor working from your premises. Documents are often posted, couriered, or sent through email in order to reach other members during a traditional audit. This process may leave documents and files vulnerable to those outside of your organization. Virtual deal rooms mitigate these risks by allowing you to choose who can view each document and what they can or cannot do.

Avoid Human Errors

Humans can make errors and send documents to the wrong email or physical address. Virtual data room reduces the chance of sharing information with the wrong person. To minimize errors, consider restricting access to email addresses within your business and restricting access based on individual users’ needs.

3. Use Granular Access

Having control over access to sensitive company documents during an audit can give you peace of mind. Making use of security features that limit access to certain authorized employees lessens the risk of your data being lost or stolen during an audit. Auditors only have access to documents when they need them, and access can be revoked once they’re finished.

You can use the granular access features in VDRs to give auditors read-only access to certain documents and grant different access abilities to each individual with VDR access.

4. Use Tracking Features

Since auditing involves confidential data, you may want to know what users are doing with that information. With activity tracking features VDRs, you can monitor the activity that happens within a given document through reports.

You can keep track of who accessed which files, how long each user spent viewing the file, and what IP address the user accessed the information from. These reports keep you informed about how your data is being used by others.

5. Use Communication Tools

The audit process involves constant communication between auditors and different departments. Many VDRs have commenting and annotation features that allow members to have private conversations about particular files with the auditors.

The conversations had in the VDR stay attached to the document for future reviews. Auditors won’t need to dig through pages of emails during subsequent audits or follow-up meetings.

6. Use Data to Prove Compliance

During a financial audit, you must provide auditors with all necessary materials related to financial records. Using a data room during this process, you can prove that you’ve met these standards.

Data rooms often track information on when requests for documentation were submitted, who examined each document, and the outcome of requests. Using data rooms keeps the process transparent and can prevent false accusations following the audit.

Financial Audits with Virtual Data Rooms

VDRs are a useful tool for many companies in this fast-paced, digital world. They have been popularly used for managing files and data during mergers or acquisitions and are now proving useful for financial audits. Use virtual data rooms for your financial audits and enjoy the benefits of a faster and better-organized process.

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