Coronavirus: Audit regulator says financial results could be delayed as it holds weekly calls with big accountancy firms
The audit watchdog the Financial Reporting Council (FRC) said today it was holding weekly calls with large accountancy firms amid worries the coronavirus epidemic could disrupt audits and delay financial reports.
The FRC issued updated guidance for auditors today which it said may be “facing practical difficulties in carrying out audits as a result of the COVID-19 pandemic”.
The watchdog said it did not want audit quality to suffer and said that companies should delay their financial reports rather than risking substandard audits.
The FRC said audit firms may need to consider developing alternative procedures in gathering information given practical difficulties such as the restrictions on travel, meeting and access to company sites.
The watchdog also called for auditors to be explicit in spelling out the risks posed to companies by the pandemic in their assessment of going concern and in annual reports.
The FRC’s executive director of supervision, David Rule said: “Audits should continue to comply fully with required standards. Additional time may be required to complete audits and it is important that this is taken, even at the risk of delaying company reporting.
“The FRC remains in close discussions with the largest audit firms to ensure any issues are being appropriately managed.”
Jon Holt, head of audit at KPMG UK, said: “We expect – and are preparing for – the fact that there may be cases where the right thing to do in the public interest is to delay our opinion, thereby impacting the timing of announcement of results, filing of accounts or other regulatory returns.
“We continue to assess each individual engagement on a case by case basis to determine what may be appropriate. We are also in constant dialogue with our regulator and the entities we audit to support them in how they manage their reporting obligations as the situation develops.”
A spokesperson for EY said: “We are engaged in ongoing dialogue with our relevant regulators, the companies we audit, and our EY teams both in the UK and around the world. Where our ability to complete our audit work is impacted by the current situation we are working to make alternative arrangements.”