Auditors are being reminded of their responsibilities to report on Key Audit Matters (KAM), including how the auditor addressed the matters.

In a statement, the International Organization of Securities Commissions (IOSCO) highlights the importance to investors and other stakeholders of having timely and high quality information about the impact of Covid-19 on issuers’ operating performance, financial position and prospects.

IOSCO said that the pandemic, and the uncertainty it has caused, has material implications for financial reporting and auditing including issuers’ disclosures of current and reliable information material to investment decisions.

Current circumstances may make disclosures outside the financial statements more challenging and hence make high quality disclosures that much more important.

In light of Covid-19, IOSCO confirmed its commitment to the development, consistent application and enforcement of high-quality reporting standards and disclosure regulations, which are critical to the proper functioning of the capital markets.

In its statement, IOSCO:

  • Reiterated the importance of disclosure of the impact on amounts recognised, measured and presented in the financial statements
  • Highlighted the importance of transparent and complete disclosures, noting that in an environment of heightened uncertainty, disclosures should be entity-specific and transparent, particularly when involving significant judgments and estimates.
  • Restated that in the current environment, it is important that issuers are mindful of the elements of reliable and informative non-GAAP measures.
  • Noted that interim financial information will require more robust disclosures of material information and management’s response to the changing circumstances.
  • Reminded auditors of their responsibilities to report on Key Audit Matters (KAM), including how the auditor addressed the matters.
  • Encouraged issuers to balance the flexibility provided by regulators extending the period to file financial information with the responsibility to provide timely and comprehensive financial information that includes reasonable and supportable judgments.

More details can be found at www.iosco.org