XRB Update 2/2020

COVID-19: Trust and Confidence—the actions of the XRB

The External Reporting Board (XRB) is an independent Crown entity responsible for accounting and auditing standards in New Zealand that give New Zealand trust and confidence in the financial reporting of corporate business, government agencies and charities.

Trust and confidence in financial reporting is critical in the current environment where COVID-19 is impacting the operations of all reporting entities across all sectors of New Zealand.

We are aware that preparers of financial accounts and auditors are all facing practical difficulties in preparing financial statements and carrying out audits. We further expect, given the current uncertainty and volatility of the economy, that more entities and auditors will need to consider reporting on material uncertainties relating to going concern.

We are therefore in the process of creating guidance for preparers and users of financial reports relating to going concern disclosures and assurance requirements, and to explain the meaning of various modifications to the audit report we expect to see in the current environment.
 
We further believe that collaboration and communication is more critical now amongst all the various stakeholders in the financial reporting chain to maintain trust and confidence in financial reporting. Since the onset of the COVID-19 crises the XRB has been reaching out to key stakeholders in the financial reporting chain, including other international and national standard setters. The purpose of this outreach is to understand what practical issues are being encountered with the standards, and to determine what we can do to assist in maintaining trust and confidence in financial reporting in New Zealand.
 
As a first step we have created a dedicated page on our website consisting of a collation of guidance and other useful information related to COVID-19 implications for accounting and auditing standards. We are continuing to conduct focused constituent engagement activities to stay ahead of the curve on accounting and auditing issues in response to COVID-19 as they start to evolve and will consider appropriate actions in response.
 
We will keep you informed of any developments in this regard. If you have any questions regarding our work, please don’t hesitate to get in contact with us.