A nugget of a 2018 article. Reminds us of the old drive for INEDs in the Global North: "...boards were...mere extensions of management, a kind of...business celebrity cheerleaders..." In parts of the Global South, the "cheerleading" view still prevails; perhaps due to cultures that hail "the chief" with disdain for "checks and balances". So, overconcentration of corporate power may be relatively unchecked. Mind you, Northern INEDs have had a hard time: "...when the shit hits the fan, [INEDs] are expected to move into high gear, forming special committees that essentially take control of the investigation while conflicted board members recuse themselves... " This is familiar to the unpopular, principled, INED on a Southern Board. When "cheerleading" is loudest, s/he is derided. When predictable trouble emerges, s/he has to salvage his reputation. Bottom line: a principled, competent and experienced, INED is worth his weight in gold to a discerning, stakeholder-serving board. I should know: I hired one for my start-up Board: a valuable "headache"!!
English Institute of Chartered Accountants issues guide to users in understanding audit opinions influenced by COVID 19
English Institute of Chartered Accountants issues guide to users in understanding audit opinions influenced by COVID 19
"...while COVID-19 will affect businesses in different ways and to different degrees, it is likely to have a significant impact on audit reports on company financial statements for the foreseeable future.
The FAQs below, created by the Audit and Assurance Faculty, are designed to help investors and other users of audit reports to better understand the different types of audit report wordings used by auditors, and their significance.
How might COVID-19 impact audit reports?
We expect to see more ‘modified’ audit opinions as a result of COVID-19. The possible types of audit opinions that auditors may give are explained below.
We also expect to see more ‘material uncertainties’ highlighted in audit reports in relation to going concern, and more ‘emphases of matter’. These do not, however, modify the audit opinion. These are also explained below.
For listed entities and other public interest entities, we are likely to see more ‘key audit matters’ (sometimes referred to as ‘KAM’) included by auditors... "
IASB Exposure Draft on COVID related Rent Concessions
The International Accounting Standards Board (Board) is seeking feedback on the Exposure Draft Covid-19-Related Rent Concessions. The Exposure Draft sets out a proposal to permit lessees, as a practical expedient, not to assess whether particular covid-19-related rent concessions are a lease modification and, instead, account for those rent concessions as if they were not lease modifications.
The deadline for submitting comments on the Exposure Draft is 8 May 2020. The Board will consider feedback on the Exposure Draft in developing its final requirements. The Board plans to issue final amendments by the end of May 2020.
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..."