The Quality of a Board will be well judged by its Responsiveness to this COVID Crisis

The Quality of a Board will be well judged by its Responsiveness to this COVID Crisis

"... There will be many... key stakeholders to take into account...Regular communications and discussions with these stakeholders about emergency policies and actions will be critical...There is no single right way to do this, but many boards will establish a Covid-19 Crisis Committee. Responsibility for multiple and urgent day-to-day decisions can be delegated to the Covid-19 Crisis Committee [with] a clear written framework under which the Covid-19 Crisis Committee can make decisions, reverting to the board when decisions fall outside the framework.

In addition to the executive management, this is a time for the chair and non-executive directors to visibly assume and demonstrate governance leadership...For example, non-executive directors could engage with and report back to boards on the views of key stakeholders."

Non-Financial Risks & the Role of Internal Audit

Banks sometimes under-estimate the importance of non-financial risks until they emerge as the serious hazards that they represent. Internal audit with adequate distance from management and a productive relationship with the Board may be vital.

"...Internal auditors should have sufficient seniority to be able to challenge senior executives inside the big banks, according to a new practice guide circulated to financial sector regulators last week by the Institute of Internal Auditors Australia.

The institute wants to bolster the power and independence of internal audit teams and improve the quality of risk-related information being reported to bank boards...

...the bank's new chairman, John McFarlane said: ""We need to have more effective management of non-financial risks, as well as a strong risk culture across the organisation in the first, second and third lines of management, as well as strong board oversight."..."

Internal Auditors are an integral element of entity resilience and response to the stresses of COVID 19

Internal Auditors are an integral element of entity resilience and response to the stresses of COVID 19

"...To be an effective and trusted partner, internal auditors must understand their organisations’ business well enough to know, understand, and anticipate risks. A firm grounding in the organisation’s strategy and operations is essential to see the risk landscape fully.

An epidemic such as COVID-19 is what risk management is all about. There should be no question or hesitation by CAEs about taking on active and high-profile roles in their organisations’ plans and actions.

...Boards also want assurance that their corporate culture encourages collaboration across the organisation to develop business plans that adapt to market disruptions, such as the COVID-19 epidemic. Internal audit should be providing that assurance.

... even if the epidemic is contained and the economic impacts are temporary and mild, the outbreak offers an opportunity to examine our capabilities, strengthen our plans to manage any significant crisis, and position internal audit as a trusted partner and advisor... "

Nigeria Financial Reporting Council provides guidelines on the execution of External Audits in the context of COVID 19

Where the impact of Covid-19 is, in the auditor's professional judgment one of the most significant matters having an impact on the audit of the financial statements, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team, then the auditor considers reporting this as a key audit matter for entities mandated to report key audit matters.

"Given the severity of the COVID-19 pandemic and its consequential impacts on employees, mobility, the financial systems, and the economy, it is very likely that auditors may encounter scope limitations or complex auditing and accounting issues which may require audit teams to consider modifications to audit opinions.

"Audit firms' Quality leaders/engagement partners are encouraged to reach out to the Council if there are any matters, they would require the support or clarification of the Council," it stated..."