Helping You Achieve the Freedoms of Time, Money and Peace of Mind
Audits under Covid-19
April 17th, 2020
Chris Lynch, CA, Managing Director
Chris Hickey, CA, Audit Manager
The COVID-19 pandemic has just made the Auditor’s job a whole lot more complex because it will have many different effects on the profit and not for profit sectors.
Revenue recognition is always a focus as any misstatement will lead to an incorrect surplus or deficit being reported. Measuring and assessing revenue received will be more challenging than ever in the Covid-19 trading environment.
The disruption we have observed will cause us, as Auditors, to think more deeply about concepts such as going concern, impairment of investment and asset values including inventories, receivables, and goodwill.
Trading conditions or raising money for charitable purposes is going to be more difficult and there will be a need to consider the risk of breaching borrowing covenants that could affect the classification of liabilities.
Perhaps more disclosure in the supplementary information supporting your financial statements will be required especially around subsequent events where any matters that have a material impact between balance date and the signing of the financial statements must be disclosed.
Entities are required to disclose information about assumptions and sources of estimation uncertainty at balance date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
It is expected that COVID-19 and its impact on the world as we know it will continue to evolve over the coming months.
More information comes to light on a daily basis and entities will have to continuously evaluate the situation as it applies to them to determine the financial reporting impact and adequately disclose this. Users of financial statements generally expect explicit, transparent and entity specific disclosures. In unprecedented times such as these, this expectation will only be higher.
Top 7 Benefits Audit and Assurance provides
Professionally presented financial statements reflecting best practice and good disclosure;
- Expert opinion on reporting, systems, governance and insights on improvements;
- Compliance to meet statutory and regulatory requirements, helping you to achieve peace of mind;
- Provides assurance to business owners, shareholders, investors, creditors, banks, grant providers, donors;
- Independent review of effectiveness of internal controls to help with detection and prevention of fraud;
- Helps inform strategic financial planning and important element in risk management;
- Assists the wider community in supporting sound financial markets and consistent financial reporting.
As Auditors, one of our fundamental traits is professional scepticism which is defined in International Auditing and Assurance Standards as "an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to possible error or in rare cases fraud, and a critical assessment of audit evidence". We must ask ourselves or our client:
1. Does it make sense?
2. What evidence is there? Is it strong enough?
3. Are there limitations on our procedures?
4. Are the assumptions still appropriate in a changing climate? Are they biased?
5. Are management's assumptions and forecasts appropriate?
6. Do we understand the information provided enough?
7. Do we need more time to get enough information?
It seems simple, but now it is going to be even more important as Auditors for us to be aware of anything that may indicate misstatement because of error or fraud, and remain critical and objective. To do either of these, information and knowledge about a business is key and sometimes, gaining this knowledge can be met with resistance.
We are delighted to advise that we have strengthened our Audit team through the addition of Chris Hickey who joined us as Audit Manager in March 2020.
Chris is a fully qualified CA with Chartered Accountants Australia and New Zealand (CAANZ). He has over 30 years’ experience working mainly in public practice and has also worked for large government entities and private companies in New Zealand and the United Kingdom.
Chris is very enthusiastic to provide clients with outstanding audit and assurance services, which reflect our philosophies of professional integrity, principled judgement and a forward-looking approach. Chris also works closely with our business development team to help provide practical and tangible services which help clients create long term value to achieve their business and personal goals.
Chris reports to our Director, Errol Burn who is a Qualified Auditor. They can help you with audits and reviews such as:
Statutory Audits of Charities, Public Benefit and Not for Profit entities
- Statutory Audits of “For Profit” entities
- Turnover audits
- Grant audits
- Agreed-upon procedures engagements
- Corporate governance reviews
- Trust Account audits for solicitors and real estate firms
- Anti-Money Laundering statutory audits
Chris Lynch, CA
Chris Hickey, CA