External Audit, Financial Reporting and Coronavirus (COVID-19)
27 March 2020
We recognise the coronavirus disease (COVID-19) outbreak is causing major disruptions and commercial volatility and want to do everything we can to help you with business continuity. Due to the fast-moving nature of government and regulatory guidance we recommend you visit the following organisations or speak with your usual BDO contact.
FRC - Read the joint statement issued today (26 March 2020) from the Financial Conduct Authority (FCA) and Financial Reporting Council (FRC) and Prudential Regulation Authority (PRA) allowing listed companies an extra 2 months to publish their audited annual financial reports. In addition, the FRC has published guidance for companies preparing financial statements during the current Covid-19 situation.
Please see all updates issued by the FRC with regards to the COVID-19 Virus response. You can also sign up to their newsletter here or view their newsfeed.
FCA – information for firms on FCA coronavirus (Covid-19) response. Full FCA newsfeed here.
ICAEW – guidance for businesses in light of coronavirus
Companies House – find out how to apply for more time to file your company’s accounts should you need to.
QCA - members may find guidance useful that has been issued that sets out the options available to companies for holding their AGMs under the current restrictions and limitations
UK Regulators ease reporting rules
Scott Knight, head of audit at BDO LLP, said: “At this extraordinarily challenging and uncertain time, we welcome any measures which can be introduced to assist listed companies with their corporate reporting. The Financial Conduct Authority (FCA), Financial Reporting Council (FRC) and Prudential Regulation Authority (PRA) have taken impressive collaborative action to provide emergency relief for businesses which are being forced to re-think almost every aspect of their operations.
“Encouraging companies to continue reporting despite the practical challenges we are now faced with sets the UK on a positively distinct path from the US, but regulation is only part of the solution. Market practice also needs to adjust to grant proper breathing space to companies through this period of disruption, and to give auditors more time while additional work on going concern is required.”
Financial Reporting Guidelines
International Financial Reporting Bulletin 2020/02: Potential effects of Covid-19 on 31 December 2019 year-end financial reporting
EFFECTIVE DATE: Immediate
ACCOUNTING IMPACT: Potential effects on impairment calculations, consideration of going concern, and additional disclosure requirements.
Download the 31 December 2019 year-end guidelines.
International Financial Reporting Bulletin 2020/02: potential effects of Covid-19 on 2020 reporting periods and onward
STATUS: effects of the coronavirus outbreak are still developing on a daily basis. This IFR Bulletin is current as of 18 March 2020.
ACCOUNTING IMPACT: widespread asset impairments along with myriad of effects on other financial statement line items; potential effect on going concern.
Download the 2020 year-end guidelines.