January 29, 2021
The impact of COVID-19 has created a need for additional continuing professional education courses for auditors who are auditing client financial statements. Fortunately there have been continuing professional education courses developed to provide the training needed by accounting professionals dealing with COVID-related accounting changes. Below are some of the specific areas requiring coronavirus-related training to ensure the areas are being audited properly.
Extra Training for Auditing
For those working in public accounting as an auditor, there are several areas to look into for extra training on how COVID-19 has affected the audit industry. First, the professional may want to consider coursework on how COVID has created a heightened audit risk in some areas of financial reporting. Some areas for extra training include:
- Internal controls – evaluating the design and implementation of relevant internal controls and how the controls have been affected by and changed by the coronavirus.
- Fraud risk – reviewing the three ‘sides’ of the fraud risk triangle: incentive, opportunity and rationalization, and then analyzing the previously identified areas of fraud risk as well identifying new areas of risk for the client.
- Noncompliance with laws and regulations – reviewing the regulations that accompany many of the economic relief programs being used by businesses affected by the coronavirus. There is a heightened risk of noncompliance with the complexity of some of the relief programs.
- Accounting estimates – auditing the accounting estimates in light of the coronavirus is important because these estimates are an area of heightened material misstatement as they can be manipulated to make the financial statements look stronger than they are in actuality.
Focusing on Financial Statements
Within the financial statements, there are specific line items that have been more affected by COVID-19. Continuing professional education courses have been created to train professionals on how to understand and properly account for these financial statement areas. Some specific areas for COVID-19 accounting coursework include:
- FASB Accounting Standard Codification (ASC) Topic 606 is the revenue recognition standard followed for financial statement accounting. Specifically, this standard addresses how businesses enter into contracts with customers to transfer goods and services. COVID-19 has impacted several areas covered in this standard, including estimating the collectibility of receivables and the timing of revenue recognition. Any course addressing how to account for the coronavirus under ASC 606 would be beneficial to an accounting professional.
- FASB ASC Topic 715 is the revenue recognition standard that addresses how to recognize pensions and other post-retirement benefits. Because this area of accounting is assumption-driven and highly dependent on estimates, it has been greatly affected by the coronavirus.
- FASB ASC Topic 820 addresses fair value measurements. This area of accounting covers the valuation of financial and nonfinancial assets using different methods and techniques, which becomes subjective under the influence of the coronavirus.
- Financial disclosures needed to address the effects of the coronavirus on multiple areas of the financial statements will require training on how to create and report the required disclosures.