by Zhanna Korneva
On July 8, 2020 Public Company Accounting Oversight Board (PCAOB) hosted a webinar for public company audit committee members. The focus of the discussion was the impact of COVID-19 pandemic on financial reporting, audits and audit committee oversight duties.
Most participating audit committee chairs indicated new or increased risks associated with the pandemic, including cybersecurity, employee safety and mental health, going concern, international operations, accounting estimates and implications of Coronavirus Aid, Relief, and Economic Security (CARES) act. Challenges in transitioning to remote work were also discussed extensively. While most participants stated that the transition to remote working environment was effective, some expressed concerns related to cybersecurity, such as increased phishing attempts and email security issues.
Audit committee chairs provided examples of helpful questions that they have addressed with their auditors as part of remote work discussions:
- Will additional time be needed to get the audit work done remotely?
- Will audit productivity be affected?
- Has remote work affected the company’s ICFR?
- Are there any technology enhancements to be considered to support remote work?
- If a review of the issuer’s interim financial information has been completed already, are there any lessons learned that can be applied to the year-end audit?
- Has the auditor assessed risks of material misstatement related to cybersecurity?
Most audit committee chairs reported more frequent communication with their auditors, as new risks and uncertainties arise. Various considerations were discussed, including challenges to timely completion of the audits, additional demand on auditors during pandemic, changes to audit plans and disclosures. Audit committee chairs also highlighted useful communication tools, such as presentations on areas of audit that may warrant increased attention, firm resources and webinars.
For the details on the conversation with the audit committee chairs, refer to the article and the webinar recording below:
https://pcaobus.org/Documents/Conversations-with-Audit-Committee-Chairs-Covid.pdf