IZAZOVI DJELOVANJA INTERNE I EKSTERNE REVIZIJE U ERI PANDEMIJE COVID-19
CHALLENGES OF INTERNAL AND EXTERNAL AUDIT IN THE ERA OF THE COVID-19 PANDEMIC

Summary/Abstract: The crisis caused by the respiratory disease COVID-19 has changed and is fundamentally changing private and business world, what is supported by the fact that in the future it will be talked about the world ‘before’ and ‘after’ the COVID- 19 pandemic. COVID-19 is a disruption that irreversibly changes the internal and external environment of companies, regardless of their size, activity or country in which they operate. As it has been confirmed several times throughout the history, in times of crisis the importance of effective and efficient internal and external corporate governance oversight mechanisms, that make a difference and contribute to the companies’ performance, is confirmed and necessity of their existence is emphasized, whereas internal and external audit represent the key mechanisms. Therefore, the modern era poses numerous new challenges to internal and external auditing or, in other words, to the entire audit profession, which must operate more proactively by anticipating all the possible scenarios of the disruptive events’ impact on companies’ business and propose tailored solutions for each situation. The impact of the pandemic caused by the respiratory disease COVID-19 on internal and external auditing is twofold. On the one hand, the companies’ business that represents the object of the audit engagements is changing, while on the other hand, the operating mode of internal and external auditing is changing also. In order for the audit profession to add value and improve the company’s business by providing timely and proactive audit and non-audit engagements, it is primarily important that internal and external audit adapt to contemporary business conditions and new challenges they are facing in their activities. In the conditions of ‘remote auditing’, especially the importance of integrated auditing, or joint cooperation between internal and external audit in order to overcome all challenges and shortcomings in the activities of either internal or external auditors, is emphasized. This ensures the synergy of internal and external corporate governance oversight mechanism that ultimately leads to company’s survival and adds value to its stakeholders in contemporary, extremely uncertain business conditions caused by the COVID-19 pandemic. This paper seeks to provide answers to the following research questions: What challenges faces the audit profession in the era of pandemic caused by the respiratory disease COVID-19? How do these challenges affect the internal and external auditing? How should internal and external audit respond to growing challenges in order to fulfil their purpose of existence? In order to answer the research questions, the objectives of the paper are defined: 1) to give an overview of the impacts of the COVID-19 pandemic on the internal and external auditing, 2) to analyse and suggest possible responses of internal and external audit to the growing challenges they face in their activities due to the COVID-19 pandemic, 3) to analyse and identify opportunities for joint cooperation between internal and external audit in order to increase their significance as corporate governance oversight mechanisms in the COVID-19 pandemic era. In order to achieve the objectives of this paper, the analysis of secondary data was performed, by using primarily scientific methods of analysis, synthesis, description, classification and comparison.

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