The focus on auditor’s reports has increased in the current environment as investors and other users of financial statements seek greater transparency from entities around the impacts of Covid-19 in the financial statements, as well as greater transparency into the audit.
The pandemic environment has led to measures such as social distancing which have changed the way that auditors and their clients perform their work. The environment is also significantly changing the economic realities for many entities and the change is continuing. Auditors need to be ready to react, while ensuring they maintain a commitment to audit quality and adherence to professional standards.
The COVID-19 pandemic has far reaching implications, with many people still comprehending and adjusting both personally and professionally. For the audit profession, the increased complexities of financial statement reporting and related risks and uncertainties, coupled with a rapid shift to virtual business operations and controls, have significantly challenged the delivery of audit engagements and necessitated virtual audits. But while much has changed, the commitment to audit quality and professional standards has not.
During its March meeting, the PAIB Advisory Group discussed public sector priorities and challenges for the profession across jurisdictions which vary due to the differing maturity levels of the accountancy profession in the sector, as well as local or regional specific issues. Regardless of jurisdiction, consistent messages included the need for continued advocacy to promote the value of the public sector finance workforce to both the organizations they work for and to the individuals themselves as well as the importance of investing in the workforce and skills development.
At their core audit committees play a crucial role in ensuring the provision of highquality, decision-useful information about an organization to its investors and other stakeholders. But in the current environment, fulfilling this mandate is becoming increasingly more complex as organizations face greater uncertainty and risks and as audit committee oversight responsibilities continue to widen.
Circular thinking has implications on the application of accounting and financial principles, for example, depreciating assets until they have no value does not provide incentives for shifting to circular business models. Accountants need to be able to evaluate decisions beyond the financial value generated.
