IAASA and the Financial Reporting Council

Since the outbreak of the Covid-19 pandemic a lot of guidance and commentary has been issued on the financial reporting and audit implications of Covid-19. Set out below is guidance published by the Irish Auditing and Accounting Supervisory Authority (IAASA) and the Financial Reporting Council (FRC) that may be of use to members.

Irish Auditing and Accounting Supervisory Authority (IAASA)

IAASA has created a Covid hub on its website which includes

• a statement by IAASA on the challenges for audit resulting from Covid-19;
• links to statements from other regulatory bodies; and
• other useful links.

The section on statements from other regulatory bodies include the following links to information published by the European Securities and Markets Authority (ESMA) and the Committee of European Audit Oversight Bodies (CEAOB);

ESMA public statement on the implications of Covid-19 on half yearly financial reports (May 2020)
ESMA Q&A on alternative performance measures guidelines in the context of Covid-19 (April 2020)
ESMA public statement regarding publication deadlines under the Transparency Directive (March 2020)
ESMA public statement on the financial reporting implications of Covid-19 on the calculation of expected credit losses in accordance with IFRS 9 Financial Instruments (March 2020)
ESMA public statement in relation to Covid-19 (March 2020)
CEAOB public statement on the financial reporting implications of Covid-19 on the calculation of expected credit losses in accordance with IFRS 9 (March 2020)

Financial Reporting Council (FRC)

The FRC has issued a number of guidance documents to auditors and preparers of financial statements in relation to issues arising from the outbreak of COVID-19 (Coronavirus).

• A recent review carried out by the FRC has found that audit firms have introduced a range of additional measures to enhance their evaluation of companies’ going concern assessments in response to the Covid-19 pandemic.

 

• On 26 March 2020 The FRC published guidance for companies preparing financial statements during the COVID-19 pandemic. This guidance for companies on corporate reporting was updated in May 2020 in relation to the reporting of exceptional items and alternative reporting measures. The guidance follows FRC advice to companies and auditors on coronavirus risk disclosures in February 2020.

 

• In these times of unparalleled times of economic uncertainty, investors are calling for clear and timely disclosures from companies, including going concern considerations, to help them identify those companies which need the most attention and support. Two new reports from the Financial Reporting Council’s Lab provide practical guidance to companies in areas of reporting that investors have highlighted as being most critical.

 
The first report infographic issued in March setting out the disclosures investors expect to see from companies during this time of uncertainty. The second report gives specific guidance on going concern, risk and viability disclosures.
 

• The FRC also issued, in March 2020, a bulletin for auditors setting out factors to be considered by auditors when carrying out audits during the Covid-19 pandemic. The bulletin was subsequently updated in April 2020 to include guidance on gathering of audit evidence through remote means. This followed guidance on audit issues arising from the Covid-19 pandemic on the 16 March 2020.

 
On 21 April 2020 the FRC published guidance on modified auditors’ opinions and reports during the Covid-19 pandemic.
 

• The FRC and the Chartered Governance Institute have issued updated guidance about company AGM’s and the impact of COVID-19. This supplementary guidance reflects the Government ban on public gatherings of more than two people and follows initial Guidance issued 17^th March 2020.