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17 Mar. 2020

AASB−AUASB Joint FAQ March 2020 The Impact of Coronavirus on Financial Reporting and the Auditor's Considerations

This AASB–AUASB Joint FAQ describes the key considerations and impacts on financial reporting and auditing arising from the Coronavirus (COVID-19) pandemic. As these concerning events continue to develop, all entities are likely to be affected in some way.

All financial report preparers and audit practitioners should consider the impact of Coronavirus (COVID-19) on interim and annual financial reports arising from this major global risk.  Whilst the initial effects were being felt most by the travel industry and education providers, the impact is now considerably wider and is creating significant uncertainty for supply chains and the global economy

The purpose of this AASB−AUASB Joint FAQ is to provide guidance on some of the issues financial report preparers and auditors should consider.  It is important that directors and those charged with governance (TCWG), Chief Executive Officers, Chief Financial Officers and auditors of financial reports, discuss and assess the impact of COVID-19 at an early stage of the financial reporting and audit process.  COVID-19 gives rise to new and rapidly changing conditions that preparers and auditors may not have previously encountered.  Auditors should be alert and exercise professional scepticism about the potential for these conditions to give rise to possible financial reporting misstatements.

Feedback and queries on this topic are welcome and should be directed to standard@aasb.gov.au or by telephone +61 3 9617 7600.