As I’m sure you’re well aware, the coronavirus pandemic has changed the world’s economy forever. As talks in the US increase of more bailout programs to aid unemployed Americans, every small business is scrambling to keep themselves afloat. Coronavirus has changed every industry, including accounting. One of the fundamentals of accounting is auditing. Auditing reviews reports and numbers of organizations and businesses to verify all information. Auditing prevents any business from falsifying information or reporting inaccurate data. However, auditing as we know it today will change due to the coronavirus. Listed below is how auditing will change due to COVID19.
Typically, auditing occurs at the end of each quarter. In some instances, companies can be audited every month depending on their industry. While the coronavirus hit before the end of Q1 this year, last year’s audits are mostly complete. However, March 31st and the Q2’s audits are still in progress. During this audit process, for the first time ever businesses will respond to the pandemic and its effect on their business. There is a list of questions you can find at this link.
Fraud prevention and awareness:
The first stimulus package offered by the government to small businesses ran out in less than 2 weeks. When the stimulus began to roll out, naturally the SBA and lawmakers were concerned about fraud. The initial purpose of the bailout was to provide small businesses with forgiveness loans to continue giving salaries to employees and keep their company afloat. However, some believe that this will cause fraud outside or inside many businesses. Whether it’s employee fraud or false reporting, auditors yet must practice due diligence to decrease the chance of fraud.
Connecting with businesses:
As COVID19 prolongs the shutdown of many states and businesses, everyone is feeling the pressure of performing for consumers and business owners. Auditing committees recently began communicating with their businesses to learn all the different ways COVID19 will affect their business, right down to the business disclosures. Some companies are changing their culture slightly to allow their employees to take the lead so management and auditors can focus on the numbers.