Auditing in the Era of the COVID-19 Pandemic: A Discussion of Challenges and Key Matters

Djoko Susanto,Adi Masli

doi:10.33642/ijbass.v7n1p5

Abstract

As of the beginning of November 2020, the number of COVID-19 cases worldwide has approached 47 million cases. In the United States, there have been over nine million COVID-19 cases, and the death toll is approaching 232,000 deaths. The pandemic has negatively affected the economy, unemployment rates, and the performance of many industry sectors. Despite the adversities of COVID-19, stakeholders need external auditors to continue providing high-quality assurance work. We discuss the challenges and key matters that external auditors face due to the pandemic. We provide thoughts and suggestions for auditors to consider. Additionally, we propose some research ideas for academic researchers to advance in the future. The topics that we emphasize include remote auditing, scope limitations, auditing inventory, disclosures on risks and uncertainties, subsequent events, going concern opinions, internal controls, and fraud risk. This article should be informative to audit practitioners, corporate stakeholders, and academic researchers. External auditing will continue to play a crucial role in the functioning of the capital markets. It is essential to gather and disseminate knowledge about how auditors can remain effective and resilient during even the most strenuous times.

Highlights

The negative economic consequences of COVID-19 coronavirus (COVID-19) outbreak to be a “public health have been significant
As of the beginning of The BEA reports that U.S gross domestic product (GDP) decreased at an annual
In June 2020, Traditionally, audit fieldwork involves a team of almost 80% of chief financial officers (CFOs) reported that their company was auditors physically working at the client’s location

Summary

Auditing Inventory

The issue of auditing inventory has been a hot topic know, we would have clients that have timber you during the pandemic. For clients that use a cycle count procedure and a the condition that may make attendance at a physical inventory perpetual inventory system, the auditor can perform a rollcounting impracticable is if the location of the inventory is in a forward procedure. Companies shall make disclosures in business relationships with particular customers Such loss of their financials about the risks and uncertainties in the customers will negatively impact future revenue and the ability following areas: (i) nature of operations, (ii) use of estimates in to collect accounts receivables. Auditors may need to perform term due to one or more future confirming events and additional scrutiny of company disclosures given the risks and (ii) the effect of the change would be material to the uncertainties borne by the COVID-19 pandemic

Subsequent Events

Internal Controls opinion brings about one of the most contentious situation

Findings

Fraud Risk inflicted upon subsequent events would be an interesting