Impact of COVID-19 on Year-End Financial Reporting
Considerations for Controllers and Chief Accounting Officers
The COVID-19 pandemic continues to be, first and foremost, a public health emergency of enormous proportions. The humanitarian cost to our communities, our country and the world is vast.
As we work together to address the threat to personal and public safety from the pandemic, companies face significant challenges to manage through the volatility, placing additional pressures on the finance and accounting function. Business implications, such as achieving revenue goals, adjusting costs, moving to a mobile workforce, managing supplier continuity, maintaining liquidity and forecasting future performance all need to be addressed.
Further, healthy internal controls over financial reporting are critical, and stakeholders expect timely, accurate and transparent financial information now more than ever. Companies that are comprehensively evaluating the impact of the crisis on their accounting, disclosures and internal controls are best placed to provide timely information to address these challenges and will be prepared for the upcoming year-end reporting and audit cycle.
To properly prepare for the year-end audit and financial reporting requirements, controllers and CAOs should proactively address four areas outlined, as follows.
Financial Statement Audit
Preparing for a financial statement audit in a primarily remote environment will require additional planning and more frequent communication with auditors, which may pose unique challenges. Organizations should prepare for these challenges by evaluating the increased risks in their financial reporting during the period, determining the ability to assist the auditors in performing procedures virtually, and preparing supporting documentation in advance to reduce time or information delays.