The covid-19 pandemic hit the world hard enough to halt all the functionality. Companies and offices were completely shut and everybody was stranded indoors. The pandemic had a drastic impact on every sector. Financial Reporting processes also suffered heavily and the loss can still be seen.
As the companies switched to work from home mode, all of the functionalities had to be made online. This posed a great challenge in terms of data transfer and online work. Financial Reporting involves lots of brainstorming and every digit and value needs to be properly entered to deliver authentic reports. But since all the amendments had to be urgently made, many financial accountants faced problems in the online mode.
Cash flow: With businesses slowing down during the pandemic, the cash flow for almost every industry is minimized. Companies are finding it hard to generate revenues, let alone be the profits. This issue has forced the companies to reconsider their resources and cut costs wherever possible. Various contractual agreements also had to be altered to save money and boost up the cash flow. In March 2020, many governments, including that of the UK, relieved companies by extending the dates to submit their audit financial reports. The Financial Conduct Authority gave an extra 2-month relief to the listed companies.
Monitoring Risk in Financial Sector
Monitoring risk in the financial sector has been a huge task for accountants all over the world. It has become more difficult during pandemics and has affected the risk-taking abilities of many organizations. In the 18th Annual conference held by Baruch University, the idea was discussed at length by the brightest minds in the sector. Financial risks these days involve cyber security and it is evident that the concept is still underdeveloped and needs to be worked on. To efficiently control the risk, there is a need to bring reforms in the field of cyber laws and ensure a sustainable future.
How to detect false or capricious data in Financial Reporting?
Psychologists analyzed the calls of certain CEOs and CFOs from 2003-2007. They observed certain speech variations that were commonly adopted by the mischievous account holders. The observations are as follows: They used third-person narrative more frequently and completely avoided the first-person one. They often spoke the content that was already prepared for them and didn't use hesitation phrases.
The business world is very different from what it was a few decades ago. Many issues in Financial Reporting have been resolved in the past years. The existing ones will also be positively solved in the coming time.