COVID-19: the auditor’s role in interim reporting

10 July: Interim reports can help a range of stakeholders understand the impact of COVID-19 on a company’s financial performance, but what role do auditors play in this process?

Interim financial reports are designed to provide an update from a company’s last complete set of annual accounts, focusing on new activities, events, and circumstances.

Given the impact COVID-19 has, and continues to have, on a significant number of companies, circumstances may have changed quite significantly since the year-end. Therefore, interim reports will be of particular interest to investors, shareholders and other users of company accounts looking to understand the impact of COVID-19 on business performance and prospects.

The requirements for publishing interim information vary across jurisdictions, as do the financial reporting and assurance frameworks that are applied in preparing and reporting on it. 

Auditor involvement with interim financial reports also varies across and within jurisdictions – in terms of the extent of involvement and assurance provided and whether the reports are publicly available or not. Some jurisdictions do not require any auditor involvement.

To help navigate this complex set of requirements, ICAEW’s Audit and Assurance Faculty has designed a guide to help users understand the role auditors play in this process, which can be accessed here. 

Commenting on the guide, Liz Murrall, Director of Stewardship & Reporting at the Investment Association said: "High-quality reporting and audit is essential in helping investors make informed, long-term decisions. This timely guide will help investors better understand the role of auditors in relation to interim reports - a topic which is particularly important as investors look to understand the impact of COVID-19 on businesses."

The guide covers a wide variety of points, including:

• What are the requirements for publishing interim financial reports?
• What reporting framework should be used?
• What is a review of interim financial information? 
• What work is performed by auditors in a review?
• What inquiries are made of management?
• What work will auditors perform in a review in relation to going concern?
• How does a review conclusion differ to an audit opinion?
• Why is the term auditor used when it isn’t an audit?

Read the full guide: COVID-19: interim reporting and the auditor’s role