The COVID-19 virus is here and it will impact us all.  We need to be prepared to deal with the impact it has on our personal as well as our professional lives.  Companies will still require audits but getting timely access to clients, data and evidence could prove difficult, with people practising social distancing and working from home.

Some companies and auditors are also facing practical difficulties in preparing accounts and carrying out audits.  This will affect the way in which audit firms carry out their audit of those companies, given restrictions on travel, meetings and access to company sites in some jurisdictions and the need to develop alternative audit procedures to gather sufficient, appropriate audit evidence.

The current situation should not undermine the delivery of high-quality audits.  Audits should continue to comply fully with required standards.

In current circumstances, additional time may be required to complete audits and it is important that this is taken, even at the risk of delaying company reporting.   We will be forced to be more creative and to think out of the box in order to comply with the auditing standards.

In addition, measures taken to counter the spread of the virus may impact the auditor’s assessment of going concern and the prospects of an audited company.  The auditor should maintain professional scepticism and objectively challenge management’s plans and significant assumptions on events or conditions affecting the entity and its environment, including uncertainties associated with the COVID-19 outbreak. Auditors will need to take into account the adequacy of disclosures made by management about the impact of coronavirus on the company.

During the planning stage of the audit, the auditor needs to take the impact of the COVID-19 into account when they perform their risk assessment.  There will also be a need for the auditor to reassess key aspects of their audit as a result of the fast-changing situation, which may require management to provide further evidence.

IRBA published an article on the implications of the COVID-19 outbreak on audits and auditors.  This article discusses how the COVID-19 outbreak will impact the process of obtaining an understanding on the client’s reporting timetable, the risk assessment process, obtaining audit evidence, going concern, subsequent events, accounting estimates and the possible implications on auditors report.

For the full article, please refer to the link provided.

We summarized the possible impact on some of the financial statement line items and the procedures possibly impacted to obtain assurance overall assertions.


The travel restrictions implemented might impact the auditors planned yearly asset verification process to confirm the existence of the assets.

Alternative procedures to verify assets include the following;

  • Motor vehicles can be verified by means of their latest registration documentation
  • Vehicles can be verified by linking them to their relevant expenditure like petrol cards, service records, insurance policies and possible repairs and maintenance.
  • Photos can be sent to the auditor of the selected assets together with a familiar employee of the company.  Photos should also include the bar-code of the asset
  • Deed searches for buildings
  • Repairs and maintenance records can provide assurance over the existence of the assets
  • When assets are physically verified the audit firms should ensure that their staff are protected by providing them with the necessary gloves, masks and hand sanitizer.

Inventory count

For the inventory counts not yet conducted we recommend that the counts be performed by smaller groups of people from the client and audit personnel’s side.  The client should ensure that the staff selected for the count is healthy and provide them with protective masks and gloves.  Audit firms should also ensure the safety of their own staff that attends the stock count by also providing them with the necessary gloves, masks and hand sanitizer.

Auditors should consider observing inventory counts on alternative dates or in some cases where attendance is impracticable, alternative audit procedures, for example, an inspection of documentation of the subsequent sale of specific inventory items acquired or purchased prior to the physical inventory counting, may provide sufficient appropriate audit evidence about the existence and condition of inventory. (ISA 501:A13)

Employee Cost

To avoid contact with numerous client employees, alternative procedures can be considered to verify employees by doing so through the use of either Skype or photos where the employee is showing their ID’s.

If possible one can rely on the previous year’s control testing. The auditor will, however, need to ensure that the controls remained the same and that the required level of comfort was obtained in the previous year.

General considerations

Supporting documentation – We recommend making use of Dropbox and OneDrive accounts to transfer supporting documentation from the client to the auditor.  Access controls to these platforms should, however, be managed strictly to safeguard the information and ensure confidentiality.  If the client chooses to make use of GoogleDrive, they should be the one to create the folder and ensure that there are measures and controls in place to safeguard and protect the information and keep it confidential.

Professional scepticism should be applied regarding the uploaded softcopies of supporting documentation since you will not be verifying the actual document itself and there is a risk of manipulation of documents.

Possible contaminated documents – If the client prefers to submit the actual supporting documentation, the auditor can request to audit it from their premises to avoid going to the client’s premises.  Once the documentation gets delivered it should be stored for a week before it is examined to allow the virus to die and prevent contamination.

Completeness will be the auditors biggest concern for the impacted period.  Each and every client will be different and should be assessed to determine the most appropriate procedure to provide reasonable assurance.  The auditor should determine the origin of the transactions and trace them back to the client’s accounting records for completeness.

In the past, we could get away with the reperformance of previous years’ procedures, but now auditors will be forced to be more creative and think out of the box to design audit procedures to ensure that sufficient appropriate audit evidence is obtained.  Auditors should share creative ideas amongst each other that will assist in obtaining the necessary comfort.  We might come up with more effective and better ways of doing things that we can take out of this difficult time.

Written by Elna Venter and Annelien Brink.

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