PCAOB, SEC Warning of Impacts of Coronavirus on Financial Reporting

Financial statement disclosures may be impacted by the spread of the coronavirus so companies should keep in close contact with their audit firms, say the PCAOB and the SEC.

“As the coronavirus continues to rapidly develop, a large number of companies around the world are likely seeing indirect effects related to vendors, business travel needs or other aspects of the supply chain,” says Steven Morrison, an assurance partner with New York-based CohnReznick (FY19 net revenue of $653 million). “It is important to note that a U.S.-based company with no operations in a coronavirus-affected area may be significantly affected if the company’s main supplier is in a coronavirus-affected area and is unable to ship inventory to the U.S.-based company. These, and other companies with similar situations, should as appropriate, evaluate the potentially adverse implications of exposure of their operations and supply chains to coronavirus affected areas, and, when appropriate, include related disclosures in their financial statement notes.”