As businesses and the economy face uncertainty and stress, this letter seeks to focus on the critical role of high-quality financial reporting and auditing to inform investors and stakeholders and bring critical integrity and confidence during these times.
It identifies the three major matters that the profession considers necessary to deal with, if we are to provide the necessary trust to business and the community in dealing with the consequences of COVID-19:
- Maintaining financial reporting and auditing standards – In responding to the consequences of COVID-19 it must be made clear that the existing set of standards remain fit for purpose.
- Address the risk of opportunistic class actions – Financial reports need to be read in the context of substantial uncertainty and fast shifting economic and business conditions. We recommend that the government continues to examine and respond to the risks and potential impacts of commercially funded litigation.
- Continued engagement on key financial reporting and auditing matters – The accounting profession stands ready to assist the government to respond appropriately to the series of issues that we anticipate will continue to emerge as a consequence of COVID-19.