The staff of the American Institute of CPAs, the International Ethics Standards Board for Accountants and the International Auditing and Assurance Standards Board have jointly released guidance on the use of specialists in COVID-19 environment, including some considerations involving the use of specialists when auditing financial statements during the pandemic.
The staff guidance, released Tuesday, aims to help accountants and auditors determine when there might be a need to use the services of a specialist to help them perform specific tasks and other professional activities within their own organizations, as well as when they serve their clients during the COVID-19 pandemic. The publication discusses some of the ethical considerations for accountants to think about when using a specialist, along with some of the circumstances that indicate a need for a specialist when auditing financial statements.
The novel coronavirus pandemic has forced many accountants and auditors to work remotely, as well as curtailed travel to client locations, particularly those located abroad, when travel restrictions remain in place in many countries.
Jeremy Smith has more than 20 years of actuarial and financial risk management experience. Throughout his professional career, Jeremy has worked extensively with national and global insurance and reinsurance companies as well as with numerous self-insured programs. Jeremy has assisted clients by providing technical actuarial studies for a wide variety of lines of business and risk exposures, and advised clients on actuarial modernization and the future of the actuarial profession.
Scott Weinstein has more than 36 years of actuarial experience. Throughout his professional career, he has worked extensively with national and global insurance and reinsurance companies as well as with numerous self-insured programs. He specializes in identifying and quantifying exposure to risk and improving actuarial processes and reporting.
Ian Sterling has more than 18 years of actuarial experience. Throughout his professional career, Ian has worked with actuaries, claims, underwriting, and finance professionals at regional and global insurance and reinsurance companies, as well as self-insured corporations. Ian has assisted clients in both an audit and advisory capacity. This has included a focus on transformation and innovation, such as, advising on actuarial and finance modernization, machine learning claim / policy level modeling, advanced data exploration and reporting with data visualization. Ian has been a frequent speaker at conferences and written articles on topics, including robotics and automation within actuarial, the changing actuarial role, and loss reserving in the future.
The guidance points out that the pandemic could also pose threats to ethical standards, and accountants may find it challenging with the changing laws and regulations pertaining to COVID-19. They may come under pressure to breach the principles of professional competence, due care and professional behavior. “Those who perform audits of financial statements may face additional challenges as well, including considerations related to auditor independence,” said the document. During the pandemic, accountants also might not have access to the usual resources they have at their offices to ensure competent performance, and they may need to turn to outside specialists to help them perform certain tasks or undertake some engagements.
The publication was developed by the staff of the AICPA under the auspices of a working group formed by the IESBA and national ethics standard setters from Australia, Canada, China, South Africa, the U.K. and the U.S. The working group was chaired by IESBA deputy chair Richard Fleck with the goal of developing implementation support resources to help accountants effectively apply the International Code of Ethics for Professional Accountants (including International Independence Standards) when facing circumstances created by the COVID-19 pandemic. IESBA and IAASB staff also provided their input. The working group plans to develop more COVID-19 guidance in the weeks ahead.
