The pandemic affects all professions but specially auditing firms which need to engage directly with the companies, according to a new study by ACCA.
In a global survey among its members, the Association of Chartered Certified Accountants (ACCA) found that the coronavirus crisis has disrupted normal client engagement activities.
“From increased pressure to complete audit work to issues in getting audit evidence, and very sensitive judgments in areas such as going concern, auditors will need to re-evaluate how they undertake normal auditing activities,” said Mike Suffield, Director of Professional Insights at ACCA.
According to the survey, 53% of the respondents said they were experiencing pressures completing client services work, and 36 % said they faced an inability to meet reporting deadlines. A quarter of the respondents said they are experiencing difficulties in gathering audit evidence and an increased audit risk relating to valuation of assets, completeness of liabilities or going concern issues.
”Even in the face of Covid-19, businesses large and small will still face existing risks such as cybersecurity. We need to remember that different ways of working and strategic reactions could change these risks or even introduce new ones. Ensuring that risks continue to be managed, both specifically in response to the crisis and more generally, is essential.”
He told The Brussels Times that some countries have extended regulatory filing deadlines because of the lockdown measures.
Most of the usual interaction between auditors and audited companies is now happening virtually. “In practice, this is likely to prove more challenging for smaller practices who may not yet have made significant investments in technology,” Mike Suffield said.
How do auditors collect audit evidence during the lockdowns? “It’s still possible to scrutinise evidence provided electronically/virtually. Auditors will need to carry out work to establish the veracity of the electronic evidence that they are provided with.”
Technology can also help in certain respects, e.g. the use of drones to confirm the existence of physical assets. “Throughout the audit process, auditors will need to continue to exercise appropriate professional scepticism and challenge in evaluating the evidence that they are provided with by companies.”
The Brussels Times