COVID and Professional Challenges

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Annual Meeting attendees were asked what ethical challenges they could foresee in potential practice situations mapped out by Ethics Committee Chair Catherine Allen (NY) and then discussed by panelists W. Michael Fritz, Tom Neill and Kevin Richards.

“We have situations where auditors are performing audits remotely and sharing information through unsecured networks,” Mr. Fritz observed. He pointed out the auditor’s being denied even the simple practice of stepping back and reading physical body language to help detect fraud.

The tax side of practice has also been impacted by the pandemic, Tom Neill noted. “This is a truly unique time: New regulations came out with a really small amount of guidance.” These are challenging times for those in the tax space, as clients are looking to CPAs for guidance when the CPAs do not have specific rules. Plus the clients may not be able to pay for advice. “Hopefully State Boards will not see complaints in the future,” he said.

There are seemingly daily conflicts as CPAs have to consider whether they are wearing their audit or their advisory hat, Mr. Richards explained. CPAs are working on survival strategies for clients, being asked to quickly perform services they may have not done before. At times they are not getting engagement letters. The CARES Act and COVID have provided substantial opportunities for CPA firms to help, with some companies needing to consider government accounting standards for the first time. The environment invites scope creep. “Firms have to insure they have processes in place so their people understand what services they can provide to audit clients in this new environment,” Mr. Richards advised.

“Thousands more governmental audits are expected because of the federal funds companies are taking,” Ms. Allen reported. She noted the AICPA is helping by making professional guidance available.