Question

If you were a CFO of a publicly-traded firm. How would you disclose to the public the impact of the pandemic on your firm's income statement? What measures would you take to make such disclosures in order to ensure you maintain legal and ethical standards? Use citations to support your positions.

Answer 1

Part I

For every publicly traded firm it is important for the company to disclose its operational matters and the regular performance metrics to the investors and the stakeholders in in a clear and truthful manner . As such ,the disclosure of the impact of covid on the business is essential for the CEO to the public shareholders .

No	Income statement Item	Description
1	Revenues	The main part of the income statement which is badly hit by the covid is the sales revenue of the firm. As such depending on the industry the firm is operating , the revenues have been impacted more or less in negative way . The company must report the changes or the decline the revenues t o the public shareholders including the justification that the future forecasts in the revenues are stabilizing over the period
2	COGS	The COGS more or less remains the same , and doesn’t reduce with the reduction in the sales revenue as the Labour overhead including the salaries had to be paid during this period of crisis Appropriate justification and the the abidance with the Human resource norms like regular payments of the labour wages and employees have been maintained must be highlighted to the shareholders
3	Operating Expenses	The administrative expenses can be reduced by the company in the times of the crisis , cutting down the salaries of the top management and hence this will improve long term shareholder confidence seeing management’s contribution towards the company in the timeso f the crisis
4	OCI	The other comprehensive income can be improved by moving the equity based holdings of the company to fixed income sources and this stabilize the overall profit /loss statement .
5	Tax benefits	Any covid related tax benefits claimed by the company to be reported and this will ensure the govt support is helping the revival of the revenues of the company to the shareholders

Part II

In order to maintain the high ethical and professional stands in the reporting purposes the following should be marinated

No	Standards
1	Holding shareholders AGM meetings in timely manner and not deferring the same
2	Proper and just disclose of the income statement t
3	Auditing the financial results of the company by both internal and external auditors
4	Adhering the reporting and GIPS standards
5	Improving the CSR and the Corporate Governance activities of the company

Thanks