Changes Beyond Auditors’ Control

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“Auditors have a responsibility to properly challenge management to assess and report the impact of climate change on their business,” the United Kingdom’s Financial Reporting Council CEO Sir Jon Thompson announced as the FRC has called for a major review of how companies and auditors are meeting requirements in this area.

The FRC intends to monitor how companies and their advisers are fulfilling their responsibilities by conducting oversight operations.

In the US, the Securities and Exchange Commission has issued a joint statement with the Public Company Accounting Oversight Board that the effects of the coronavirus on a company’s financial disclosures and audit quality “may be difficult to assess or predict, because actual effects may depend on factors beyond the control and knowledge of issuers.” Issuers are urged “to work with their audit committees and auditors to ensure that their financial reporting, auditing and review processes are as robust as practicable in light of the circumstances in meeting the applicable requirements.” The SEC states that it encourages issuers and their advisors to contact the SEC staff regarding any need for relief or guidance. “Relief may be made available on a case-by-case or broader basis as circumstances merit.”