New Audit Guidance Related to COVID-19

Recently, Melisa Galasso, founder and CEO of Galasso Learning Solutions joined Wolters Kluwer’s Cathy Rowe for an Audit Talks Podcast on new audit guidance related to COVID-19. Notably, Melissa is also an AICPA Technical Issues Committee member. During that podcast, these questions and more were addressed.

  • Is there any relief from the Office of Management and Budget (OMB)?
  • Where is the best place for firms to get guidance?
  • Are firms modifying procedures or auditing differently because of this?

The podcast, which is about 15 minutes long, is filled with valuable insights and tips. For that reason, you should definitely listen to it – Special Considerations for Reporting with Melisa Galasso. In the meantime, here’s a taste of what you will hear regarding new audit guidance related to COVID-19.

Best place for firms to get guidance

Regarding the best place for firms to get new audit guidance related to COVID-19, here’s some of what Melisa shared.

  • First,public announcements from GAQC, Government Audit Quality Center. Typically paid subscriptions, for now, you can access links that summarize some of the key impacts. Additionally, there’s some practical advice on how to implement certain elements.
  • Second, SEC: CF Disclosure Guidance: Topic No. 9 gives advice with required disclosures and other securities law obligations that companies should consider with respect to the COVID-19 pandemic and related business and market disruptions. Notably, they do not say you have to disclose this or that. Instead, they provide a list of things to consider. For example, you might want to consider the impact on going concern or the impact on subsequent events.
  • Third, FASB memo on debt restructuring. It says they cooperated with the federal governments, providing guidance to be sure it’s following GAAP. The big takeaway is that a modification of loan terms does not automatically result in trouble debt restructuring. This is a great opportunity for banks and borrowers.

Are firms modifying procedures or auditing differently?

Regarding whether firms are modifying procedures or auditing differently, the podcast shares insights like:

  • First, the AICPA has webinars to aid with the struggle of observing inventory remotely.
  • Also, the Journal of Accountancy has a helpful article regarding various options when the auditor cannot be physically present.
  • In addition, firms should leverage technology like video for fraud inquiries to capture body and facial expression.

Conclusion

In conclusion, both Melisa and Cathy agree that the AICPA is trying, as best they can, to ensure that no firm is left behind during this pandemic. So, again, listen to the full podcast here. Because every new piece of valuable guidance during this crisis will help your audit team adjust to a new normal.

#ForwardTogether, #COVID, #COVID-19

AUTHOR

Joel Ortner

All stories by: Joel Ortner