The COVID-19 pandemic has come and gone but its significant impact on various sectors of the economy, including the auditing profession in Nigeria and around the globe is still being felt. The auditing profession is an essential aspect of financial reporting and is critical for ensuring that companies comply with accounting and auditing standards. This write-up examines the impact of the COVID-19 pandemic three year after on the auditing profession in Nigeria and around the globe.
The COVID-19 pandemic has led to a significant disruption in the global economy, with many businesses forced to shut down or operate under difficult conditions. The lock-downs and social distancing measures implemented to curb the spread of the virus have also affected the auditing profession. One significant impact is the interruption of on-site audits, which are necessary for the proper evaluation and validations of assertions upon which the financial statements are prepared. The Global accounting bodies such as IFRS Foundation, IASB, ISSB has responded with series of financial standards reviews in recognition, measurement and disclosure of COVID-19 impacts on financial statements such as:
- Accounting considerations related to COVID-19
- Combating COVID-19 with resilience
- IFRS 16 and COVID – 19
- IFRS 16 and COVID-19- Extension of practical expedient
- Classification of liabilities-Effective date
- Collections of COVID-19 resources
The pandemic has made it difficult for auditors to conduct on-site audits, as the restrictions on movement and gatherings have made it challenging to access physical documents and conduct physical inventory counts. This has led to delays in the completion of audits, which has had a ripple effect on financial reporting timelines, even three years on, audit staff carries out remote validation of audit evidences.
Another impact of the pandemic on the auditing profession is the increase in remote working. With many auditors forced to work from home, there has been a shift towards digital auditing, which has its own set of challenges. Auditors need to be proficient in technology to conduct remote audits effectively, and there is a need for increased collaboration and communication to ensure that audits are completed on time.
The pandemic has also led to an increased focus on risk assessment in the auditing profession. The economic uncertainty created by the pandemic has led to an increased risk of fraud and financial misstatements, making it necessary for auditors to be more vigilant in their risk assessment procedures. The recent failure of the Silicon Valley Bank and Signature Banks in USA and Babcock International in UK exposes both KPMG and PWC to potential auditors’ liabilities and significant impairment on their brand as top four accounting firms globally.
In response to the pandemic, the auditing profession globally has adopted various measures to mitigate the impact. These measures include the increased use of digital auditing tools and the adoption of new auditing standards that take into account the challenges posed by the pandemic. There has also been increased collaboration and communication between auditors and clients to ensure that audits are completed on time. The use of teleconferencing tools such as Zoom, Microsoft Teams, Skype, Webex Meetings, BlueJeans meetings, Google workplace etc has given the profession a leverage to remotely interact with clients more effectively.
In conclusion, the COVID-19 pandemic has had a significant impact on the auditing profession in Nigeria and around the world. The disruption caused by the pandemic has led to delays in the completion of audits and has forced auditors to adopt new ways of working. However, the auditing profession has shown resilience in response to the challenges posed by the pandemic, with auditors adopting new tools and procedures to ensure that audits are completed on time and financial reporting remains accurate and reliable.
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