Question

Given the current COVID-19 environment, indicate how you think the emphasis on financial accounting disclosures and financial statement reporting may change.

Answer 1

Issue: Impact of COVID 19 over the Financial Reporting and disclosure

Discussion and Explanation: With the COVID 19 impact has drastically changed the ease of doing business but also impact the internal environment drastically. The Impact is still not in the hand of the owner but followed by each and every employee or stakeholders associated with them to come over the same. Including society also.

Secondly the following factors are effected :

1. Going Concern Impact

2. Cyber security measures

3. Management estimates

4. Focus on the future availability and the changes in the process

With the above disclosure of the major factors impact the business at large, required to be covered in each and every financial statement.

For Security measures and cyber security and internal control effectiveness and its implementation in the entity. It also disclose the relevant of such measures in respect of financial disclosure and its preparation.

For Management Estimates: How the management is making valuation of Inventory ove r a period, the disclosure for such method of valuation and way of physical verification of the same is required. The Auditors disclosure over such estimates and method should be specifically detained in the statement. And the extent of viability.

For Going Concern: Disclosure about this is the major factor as it will decide the future of the investment decision made by the investor is made appropriately or not, whether is entity is about to close its operation.

The above factors are play vital role for making sound decision for future investment with the entity.