This special issue paper aims to describe the early effects of COVID-19 on auditing in New Zealand, and the subsequent reforms that the authors expect will follow.
The authors use published sources to discuss the impact of COVID-19 on auditing, and potential reforms.
COVID-19 was at first expected to have a substantial impact on audit outcomes such as audit opinions. The effects that eventuated have been much less substantial so far. Nevertheless, the authors expect reforms to auditing to take place, especially including non-audit services, reports on inspections of auditors and more reporting on going concern issues by directors, followed by increased responsibility for auditors. In future, there may be further changes including reform to the liability of auditors, reporting on internal control, more responsibility for fraud and changes to corporate governance.
Limitations include the ongoing nature of the COVID-19 crisis. Further effects may yet eventuate.
Financial report users and auditors should anticipate changes.
This paper provides early evidence of the impact of COVID-19 on New Zealand auditing and predicts changes to the regulation of auditing.
