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Coronavirus timeline: reactions from the accountancy profession

Coronavirus (COVID-19) continues to spread across the world, the International Accounting Bulletin and The Accountant will be collating all the latest news and updates from the profession on the pandemic’s impact.


1 April 

Zoya Malik, Group Editor, International Accounting Bulletin put some quick fire questions to Tim Wilson, CEO, MSI Global on Covid -19’s impact on business operations

Zoya Malik: What is your network/ association doing to assess new Covid-19 developments to advise member firms to help them reduce risk? 

Tim Wilson: We have established a message board through a professional messaging app which enables our firms to share how they are advising clients and responding within their firms, to the virus.  With both law firms and accounting firms in MSI, this has been useful from both a global and regional perspective.  We have also initiated a series of webinars, open to all members.  The first of these is entitled “Sharing leadership and management solutions to the challenges of Covid-19”.  This is being followed up with other webinars in which we will encourage firms to share thoughts and ideas on other aspects and include past speakers too.  The key is to stay connected and to ensure we continue to collaborate.    

ZM: What is the plan to meet member firms and clients due to cancelled events? What is replacing events and how do you intend to knowledge share?  

TW: We are placing a focus on virtual meetings.  We will be augmenting the webinar series with additional specialist interest groups and using our professional messaging app and newsletters to share knowledge.  Perhaps the virus will push for more virtual meetings in the future?  Covid-19 + Carbon footprint challenges + recession = the perfect storm for a refresh of the conference programme?

ZM: Which of your member firms' markets are currently operating under lock-down? How are they managing to operate? 

TW: Most are now in lockdown, increasingly so.  Remote working is the modus operandi – the question is how sustainable will this be?

 

1 April

Blick Rothenberg: Directors being left behind by the Government

While the UK Government has provided considerable support for the employed workforce and some of the self-employed in response to the COVID-19 pandemic, owner-directors have fallen between the cracks, says tax and advisory firm Blick Rothenberg.

Blick Rothenberg partner Richard Churchill said: “The Institute of Directors estimate that there are over two million limited companies in the UK employing between 0-9 employees, and such companies include some of the UK's most enterprising and creative firms. Protecting these owner-director microbusinesses now is essential if we want to ensure our economic recovery once this crisis is over.

“There is not yet enough support for these businesses. In the first instance, we welcome more clarity around enabling directors to apply for furlough through the Job Retention Scheme (JRS), while continuing their statutory duties. That said, the monetary support through the JRS is likely to be minimal because owner-directors usually pay themselves a small salary (typically up to the National Insurance Contribution (NIC) threshold) and then receive the majority of their income through dividends."

He added: "We urge the Government to expand the income support available for owner-directors, putting them on par with the grants available for employees and the self-employed. This could come in the form of a grant; the lower of £2,500 per month or 80% of their 2018/19 salary plus company dividends (pro-rated to a monthly amount). The payment can be administered in the same way as JRS, via payroll and subject to tax and NIC.”

 

 

31 March

Zoya Malik, Group Editor, International Accounting Bulletin put some quick fire questions to Dr. Christian Gorny, CEO, ETL Global on Covid -19’s impact on business operations

Zoya Malik: What is your network/ association doing to assess new Covid-19 developments to advise member firms to help them reduce risk?

Christian Gorny: We are sending out internal mailings with information on how to behave and act in order to reduce risk. Moreover we have internal update calls. The most important is however, to lead by example. Personal meetings, travel and conferences have been postponed, cancelled or replaced by online alternatives. We promote very much the possibility of teleworking from each individual’s home office. Moreover, as a network of firms with a common shareholder, we try to help our partners financially with loans to cover temporary shortages in cash flow, wherever necessary.

ZM: What is the plan to meet member firms and clients due to cancelled events? What is replacing events and how do you intend to knowledge share?

 Again, some events are only postponed, others have been cancelled completely. Modern communication technologies are used for knowledge sharing.

ZM: Which of your member firms' markets are currently operating under lock-down? How are they managing to operate?

CG: Meanwhile most European countries have locked-down, so it has become a more and more common situation. Most colleagues are working remotely from home. Some have even taken this crisis as an opportunity, either to improve their internal structures and processes with regards to digitalisation or to engage with their clients proactively, act as their trusted advisor and strengthen the client relationship.

ZM: What channels are in place to knowledge share amongst member firms in terms of the impact of Covid -19 on their business and their response plans for continuing to serve clients?

 CG: As mentioned above, we are holding update calls and virtual meetings in this context. Members who cannot participate in calls or virtual meetings will find continuously updated information on our intranet solutions for network members. Member firms are informing clients through e-mail newsletters, LinkedIn posts, pop-ups on their homepages and similar.

Our knowledge sharing is working very well amongst our network firms. We have now also set up a public central platform for clients and business partners: https://etl-global.com/covid-19-updates/

In respect of business and operations we hold weekly update calls on both, country and network levels. Feedback is the same from every direction: There is a lot of demand for advisory services at the moment, in particular tax and payroll/HR related questions and advice on subsidies/government grants and loans as well as financial management in general. Accordingly, all our offices are extremely busy at the moment and do their best to meet their clients’ requests remotely. At the same time, all colleagues are facing a growing risk in respect of receivables collection and cash flow management the impact of which will however only show with a little time lag.

 

 

30 March 2020

Zoya Malik, Group Editor, International Accounting Bulletin put some quick fire questions to Liza Robbins, CEO, Kreston International on Covid -19’s impact on business operations

Zoya Malik: What is your network/ association doing to assess new Covid-19 developments to advise member firms to help them reduce risk? 

Liza Robbins: We have consulted a Business Continuity Expert and shared his advice with member firms. We have arranged facilitated (with the business continuity expert) a telephone meeting for our member firms to share best practice.

ZM: What is the plan to meet member firms and clients due to cancelled events? What is replacing events and how do you intend to knowledge share? 

LR: For meetings (a small number of people) we are using technology (Teams, Zoom, Skype, etc), but conferences are being postponed due to the high number of attendees. Kreston has a developed a training programme (including webinars), which allows us to continue to best -practice sharing with our member firms.

ZM: Which of your member firms' markets are currently operating under lock-down? How are they managing to operate

LR: It is a changing situation, but the first was China, then Italy, then Spain, etc, many now with government “work from home” directives in place. Many of our firms have smart (flexible) working in place, so in many cases employees can relatively easily continue working.

 

27 March

Zoya Malik, Group Editor, International Accounting Bulletin put some quick fire questions to Michael Scott, Director, Kudos International on Covid -19’s impact on business operations

Zoya Malik: What is your network/ association doing to assess new Covid-19 developments to advise member firms to help them reduce risk? 

Michael Scott: A Technical factsheet has been produced and issued on 18 March on Considerations for auditors under COVID-19. Members are being invited to Zoom Meetings regionally, to discuss developments and share ideas on how to help both clients and fellow member firms.

ZM: What is the plan to meet member firms and clients due to cancelled events? What is replacing events and how do you intend to knowledge share?

MS:  We have had to cancel our annual conference in Miami which was due to be held in June. This has been pushed back to November 2020. This will be replaced by an increased number of technical webinars and regional Zoom meetings.

ZM: Which of your member firms' markets are currently operating under lock-down? How are they managing to operate? 

MS: UK, Ireland, Cyprus, Malta, Argentina, Lebanon. All are operating with staff from home and using online tools. In other countries where the office is still open, no clients are allowed to visit and all meetings are conducted by SKYPE or Zoom Meeting or similar.  

ZM: What channels are in place to knowledge-share amongst member firms in terms of the impact of Covid -19 on their business and their response plans for continuing to serve clients. 

MS: We are using Zoom meetings, Linkedin groups, ordinary e-mail for general matters. We have as mentioned produced Technical factsheets and Technical Webinars to address technical matters.

 

 

AAT responds to UK measures to help self-employed

Yesterday evening, UK Chancellor Rishi Sunak announced that the government would provide 80% of profits for self-employed workers, capped at £2,500 ($3,058).

Association of Accounting Technicians (AAT) tax policy expert Brian Palmer comments: There is huge complexity in arranging a scheme of this type, particularly in such a short time period, and on balance what is on offer from the government is very generous indeed, particularly as those eligible will be able to continue working and yet receive the grant.

"However, there are still many pressing concerns for those who do not qualify due to being self-employed for less than a complete tax year and have not yet filed a tax return, therefore having no profits to average. Without the prospect of a direct grant from government, they risk being left to the mercy of an overstretched UK benefits system. Additionally, the three-month wait for funds for those who qualify will leave many in an increasingly precarious position.

"What’s more, when this is all over the Chancellor has warned that the self-employed will be left facing the promise of a 'levelling of the playing field' that will inevitable result in raising self-employed people's tax and National Insurance payments to match those on PAYE.

"Finally, there were also no crumbs of comfort for those who are self-employed from every perspective but provide their services through a limited company, many of whom draw a low salary and top up their income with dividends. They will not qualify as self-employed or for a significant payment from the Coronavirus Job Retention Scheme. Instead, they risk dropping through the cracks. In a time when large numbers of people - both self-employed and those working for larger firms - are already struggling financially, and with the situation likely to worsen over the coming weeks and months, we must ensure that everyone gets the support they need to stay afloat and that the UK economy is able to not only recover, but also to thrive in future."

 

CIMA exams to be taken remotely

The Chartered Institute of Management Accountants (CIMA) has announced that from May 2020, CIMA students will be able to take their exams remotely for the first time.

This comes as the coronavirus pandemic has forced many test centres to close, preventing the delivery of CIMA Objective Tests and Case Study exams to students around the world.

The Association of International Certified Professional Accountants (the Association), the unified voice of CIMA and the American Institute of CPAs (AICPA), has been working closely its testing partner to come up with a testing solution since the beginning of the pandemic.

The Association vice-president examinations – management accounting Stephen Flatman said: “We are living in unprecedented times and over the past weeks we have seen, rightly so, the majority of test centres close around the world to ensure everyone’s safety and wellbeing.

“As a result, our students have had their studies interrupted and were prevented from taking their exams. We are happy to share the good news today that CIMA students will be able to take their Objective Tests and Case Study exams from their homes and with minimal disruption.”

 

26 March

Zoya Malik, Group Editor, International Accounting Bulletin put some quick fire questions to Marco Donzelli, CEO, HLB on Covid -19’s impact on business operations

Zoya Malik: What is your network/ association doing to assess new Covid-19 developments to advise member firms to help them reduce risk?

Marco Donzelli: In response to the growing Covid-19 pandemic, on 12th March, HLB took the decision to close the Executive Office and now all our staff are working 100% remotely. While remote working has always been a part of the Executive Office’s infrastructure, the safety of our employees was and remains our priority. With good IT infrastructures and digital collaboration platforms already in place, remote working has also been a part of our members’ work practices for several years, so this situation has not seen a significant loss in productivity or ability to be there for their clients.

ZM: Which of your member firms' markets are currently operating under lock-down? How are they managing to operate?

MD: While most of our firms have now closed their physical offices, they remain fully operational and available to seamlessly service their clients. Of course, there are some regions where remote working is less common, so the pandemic has presented some challenges, but we are not receiving any alarming messages from firms about their ability to adapt to a change in circumstances.   

ZM: What channels are in place to knowledge-share amongst member firms in terms of the impact of Covid -19 on their business and their response plans for continuing to serve clients?

MD: We are actively using technology to collaborate, service clients and communicate with members. A network wide communication was sent on 16th March informing them of our business continuity plans. We created a dedicated intranet hub space which is constantly being kept updated with links to guidance and best practice on areas such as remote working and business continuity planning. It is also a place where members can share their insights and offer resource to each other. In addition, we published a statement on our website and communicated this to our external stakeholders through our social media channels. Our collaboration platforms keep members updated on the latest developments they need to know. 

ZM: What is the plan to meet member firms and clients due to cancelled events? What is replacing events and how do you intend to knowledge-share?

MD: We have taken the decision to postpone all our upcoming conferences and are exploring the option to deliver our conference programme virtually to our members, as travel bans prevent us from meeting in person. The development of our talent pool remains a priority for us, so in addition to hosting these conferences virtually, we are investigating how to award CPE credits for attending them. Our ability to knowledge-share with our members will continue through our e-learning platform with content from internal members as well as our external strategic partners. While these are unprecedented times, HLB and its firms are well-placed to meet the challenges ahead. 

 

 

AAT calls for decisive action on late payments

The Association of Accounting technicians (AAT) has called on the UK government and large employers to take stronger action on payment of suppliers on time, to help support SMEs during the COVID-19 pandemic, ahead of the UK Chancellor’s announcement on measures to support the self-employed.

AAT is encouraging larger organisations to speed up payments to SMEs who may be struggling to deal with the ongoing financial risk posed by the crisis. This will help to reduce the negative impact of the crisis on small business and speed up their recovery.

“Small businesses are likely to be among the worst hit by the Covid-19 pandemic and, although there has been a significant package of support introduced by the government in recent days to help them cope – including Statutory Sick Pay relief, a 12 month business rates holiday for the hospitality and leisure sectors, small business grant funding and a new Business Interruption Loan Scheme - we’re disappointed this hasn’t been extended to addressing the issue of late payments. Resulting cashflow issues have a huge impact on the health and success of small businesses, causing almost a quarter of small business insolvencies. Even for firms that can absorb late payments, this can lead to stunted growth, damaging productivity and innovation, and ultimately stifling their opportunity to expand.”

“That’s why we’re calling on all large businesses to do the right thing and ensure that they pay all their small suppliers within a 30-day limit. This will increase the number of small businesses who are able to stay afloat during the pandemic and enable them to bounce back more quickly in the coming months. Small businesses are the lifeblood of the UK economy and reducing the negative effects of this unprecedented event through prompt payments will ensure that many more of them are not only able to weather the storm of Covid-19, but also support the UK’s economy and help protect jobs during the recovery period.

“We’re also encouraging small business owners that may be struggling to cope with the sudden loss of business due to Covid-19 to reach out to customers and let them know the challenges they are facing, if they haven’t already done so. Additionally, they may also wish to talk to their landlords about taking a rent holiday or accepting reduced payment and check their business interruption insurance to see if they’re covered for this situation.”

 

 

25 March

Covid-19 and contractual obligations: Where will the costs fall?

As the human tragedies of coronavirus spread throughout the world, the economic consequences are not far behind. Chris Robinson, specialist corporate lawyer at Excello Law suggests that businesses everywhere are beginning to look at their supply chains and their contracts, and assesses who will bear the inevitable costs and losses  

Orders for goods or fixed-price contracts for services that are not going to be needed, consumer bookings for untaken holidays or season tickets, excessive stocks of clothing or shortages of groceries – all are causing anguish and are going to land someone with a bill.

Ideally every business would know its supply chain and its routes to market, and structured contracts would allocate risks appropriately and minimise risks. In practice, supply chains are long, complex and often mysterious, stretching across the world. Where the loss falls may, in practice, be almost random. Often it will be a man-in-the-middle operating on thin margins who catches the full liability, because he has a mismatch in contract terms between his customer and his supplier. His customer is allowed to cancel orders or return goods; but the supplier does not accept returns and demands payment. Consumer-facing businesses are particularly vulnerable – consumers may be entitled to cancel and demand refunds or compensation, but the B2B contracts with suppliers will not have the same rights. Meanwhile your landlord, employees and utilities all need to be paid.

In English law there is no general relief from liability for problems outside your control. You can still be in breach of contract if you cannot perform your obligations. In that case, you might have a liability to compensate the other party – which might be a much bigger sum than you would have made from the contract.

What should your clients be thinking about as they review their contracts?

  • Which law applies? The laws of other countries are very different anyway, and the responses to the coronavirus pandemic will be varied.
  • Do you have to modify your services because of legal restrictions, such as closing retail premises? You must obey the law, even if that puts you in breach of contract.
  • Do you have business interruption insurance, or any other relevant cover?
  • Do your contracts contain a force majeure clause? Force majeure clauses are common in contract terms and standard conditions. They each depend on their own wording, but often they allow a party to suspend complying if it cannot perform for reasons outside its reasonable control. Often there is a list of examples, which might include epidemics. Labour shortages, transport disruption or supplier default may be force majeure events, though they would have to be the main cause of the disruption. If the service is suspended, so too is the payment for it. Sometimes there is also a right to terminate. Usually the affected party must notify the other to activate the clause – do it now!
  • Has the contract been frustrated? Frustration occurs when an unforeseen event renders performance illegal or impossible, or changes the obligations so fundamentally that it is no longer the same contract. That is rare, but a contract to provide an event or service – a party or a restaurant business – could well have been frustrated by illegality. If the contract is frustrated, neither party is likely to be entitled to any compensation. The contract comes to an end. Expenses incurred are recoverable, and advance payments are refundable. Long-term contracts are not usually frustrated by short-term obstacles.
  • What steps can you take to reduce your losses? Often there will be a duty to mitigate loss if you want to make a claim against another party. Is there scope for co-operation in the supply chain to reduce total loss?
  • What government money is available to the parties that may help? The UK employee “furlough” scheme is particularly significant – if workers can be withdrawn from a service and laid off on the scheme, most of the cost is transferred to the government. That may need co-operation amongst the parties. Government schemes may provide broadly-targeted help – co-operation might allow it to achieve its intention and reach the right place, without anyone getting double-payment or missing out on claims.
  • What further government measures are likely? Things are changing all the time, and often there is a delay between statements of intention, and the actual detail of a package.

 

 

IRBA: COVID-19 presents opportunity for audit profession to demonstrate resilience

South Africa’s Independent Regulatory board for Auditors (IRBA) has issued guidance in relation to the implications of the COVID-19 outbreak on audits and auditors.

IRBA CEO Bernard Agulhas said: “This outbreak presents an opportunity for the audit profession to reflect on the recognition of its public interest responsibility, and to demonstrate its independence and resilience to external factors. Auditors should continue to apply the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.”

Some of the key areas of the guidance include:

  • The COVID-19 outbreak may disrupt the business operations of entities and the financial reporting process may also be impacted. Auditors should proactively discuss these matters with clients to understand whether there is an impact on the client’s reporting timetable and the audit processes.
  •  With the COVID-19 outbreak, auditors may need to reassess the risks of material misstatement of the financial statements, as the information on which the initial risk assessment was based may have changed. For audits in progress, auditors should evaluate the impact and may need to revise their risk assessments and modify further planned audit procedures in accordance with ISA 315 (Revised).
  •  Due to the travel restrictions and various working arrangements, auditors may have difficulties with accessing client premises to perform audit procedures; and/or may not be able to obtain the sufficient appropriate audit evidence.
  • For group audits, component auditors in affected countries may encounter difficulties in obtaining sufficient appropriate audit evidence, which may cause significant delays in the completion of component audits. In addition, the group engagement team members may not be able to travel to affected countries to review the work papers of significant components. The group engagement team is, however, responsible for obtaining sufficient appropriate audit evidence to form the group audit opinion. The group engagement partner is responsible for the direction, supervision and performance of the group audit engagement.

In addition to the above areas, auditors may also consider the implications for the auditor’s report.

A dedicated COVID-19 webpage has been added to the IRBA website. This will form a central repository of information that has been released both locally and internationally in relation to the outbreak and the implications on audits and auditors.

 

23 March

South Africa’s IRBA assists government with containment

South Africa’s Independent Regulatory Board for Auditors (IRBA) has put in place a number of containment measures since South African president Cyril Ramaphosa declared a National Disaster on 15 March.

IRBA CEO Bernard Agulhas said: “As an entity reporting to the Ministry of Finance it is important that we are aligned in our approach with regards to staff and stakeholders to achieve the level of containment which government seeks and whereby we can play our part in limiting community transmissions as quickly as possible.

“The leadership of IRBA met on Monday to discuss how we would respond. During Tuesday we agreed the parameters of our COVID-19 Safety Protocol and at close of business on Tuesday we briefed staff on the short-term measures we intended to take in the period to April 14. Staff were asked to stay home and we instituted a remote working policy which will be in effect until April 13.

“We have documented our COVID-19 Safety Protocol, including how it will be implemented in line with all IRBA’s other policies and procedures.  Communication will be circulated to all our stakeholders on how to interact with our IRBA staff in this period.  The IRBA will continue to operate virtually.”

Agulhas concluded: “We are also engaging regularly with the auditing profession as well as accountancy bodies and other stakeholders to align responses to the current situation where it is possible. These are challenging times and as the restrictions from government continue to change we will update our safety protocol to ensure that we remain aligned to government’s approach to containment.  The sooner the majority of us are staying at home and limiting movement, the sooner transmission will slow down and this will enable government to focus on getting adequate resources into place to assist the vulnerable in society. 

 

UK’s FCA requests companies to delay announcement of preliminary financial accounts

The UK’s Financial Conduct Authority (FCA) has strongly requested all listed companies to observe a moratorium on the publication of the preliminary financial statements for at least two weeks.

The FCA said that due to the events surrounding the spread of COVID-19 over the last few weeks, the basis on which companies are reporting and planning is changing rapidly and that it is important that due consideration is given by companies to these events in preparing their disclosures.

The regulator noted that listed companies and the audit profession are facing unprecedented practical challenges due to the pandemic. The FCA believes the practice of issuing preliminary financial statements in advance of the full audited financial statements is adding unnecessarily to the pressure on companies and the audit profession at this moment.

The FCA is currently in talks with the Financial Reporting Council and the Prudential Regulation Authority about a package of measures aimed at ensuring companies take the necessary time in these uncertain times to prepare appropriate disclosures and address current practical challenges and the three bodies intend to announce details shortly.

 

 

20 March

Additional financial support announced by UK Government

The UK Chancellor Rishi Sunak has introduced measures to provided additional support to businesses who may face making redundancies due to the spread of COVID-19 by offering to subsidise up to 80% of employees’ wages.

Sunak also said that VAT payments have been deferred until the end of June for businesses of all sizes and business interruption loans would be interest free for 12 months, an increase from the six month interest free period announced on Monday (16 March).

The Chancellor announced the measures following Prime Minister Boris Johnson’s call for all pubs, clubs, restaurants, theatres and other hospitality and leisure venues to remain closed after closing tonight. Johnson said that this measure will be reviewed on a monthly basis.

 

 

COVID 19 - Accountancy CEO question time

International Accounting Bulletin group editor Zoya Malik put some quick fire questions to DFK CEO Martin Sharp on Covid -19’s impact on business operations

What is your network/ association doing to assess new Covid-19 developments to advise member firms to help them reduce risk? 

We are encouraging and assisting members to share best-practice in their communication with clients and HR.

What is the plan to meet member firms and clients due to cancelled events? What is replacing events and how do you intend to knowledge share? 

We are setting up webinars covering both technical and practice management topics.

Which of your member firms' markets are currently operating under lock-down? How are they managing to operate?

This is changing by the day! Most have implemented remote home-working and greater use of online conferencing and portals.

 

 

What channels are in place to knowledge share amongst member firms in terms of the impact of Covid -19 on their business and their response plans for continuing to serve clients? 

These will include members’ websites, list-serve and webinars.

ICAEW makes changes to its exam schedule 

Th Institute of Chartered Accountants in England and Wales (ICAEW) has announced cancellations and changes to its June and July examinations because of the global challenges posed by coronavirus.

The June ACA professional level exam has been cancelled, and ICAEW is exploring several options to accommodate students who have been affected, including larger exam sittings.

The advanced level ACA exams due to take place in July have been postponed until the end of August.

The decision reflects the guidance and restrictions implemented by the UK government and other affected countries in response to Covid-19.

ICAEW executive director, learning and professional development, Mark Protherough said: “While we appreciate this decision will disappoint a number of our students, their health and wellbeing is our main priority.”

 

AAT suspends all assessments from 22 March

The Association of Accounting Technicians (AAT) has suspended all assessments from 22 March due to the spread of COVID-19 and government advice.

AAT continues to be fully operational in all other respects, including the portfolio reflective element of apprenticeship End Point Assessments, which will be conducted remotely. All support services remain available to its students and members.

 

 

How to make the most of working from home

Following the UK Government’s latest advice on Covid-19, many of us will soon be working from home for the foreseeable future, comments CABA learning and development manager Laura Little.

For those who aren’t used to working remotely, this can be a particularly disruptive experience and may require some time to adjust. Some people initially enjoy the idea of not having to leave the house in the morning, but may soon find the comforts of home distracting, leading to a loss of productivity.

Despite the initial teething issues, studies have found that over 77% of professionals say they feel more productive when working remotely, and an additional 30% feel as though they accomplish more in a shorter period of time.

So, what is the best advice for people working from home?

Create a work environment of your own

In order to get into a ‘work’ frame of mind when you’re at home, it’s important to have a space set aside which is designated for working. This helps to create a clear distinction between ‘work’ and ‘play’ and trains your brain to be more productive during work hours. Not only does this allow you to concentrate more on the task at hand, it also makes it easier to switch off at the end of the day.

If you don’t have a study you can use, the kitchen or dining room table is often a good place to set up. If you share the space with other people, make sure you communicate clearly to them that you are working and set clear boundaries around your work schedule.

Finally, avoid the temptation to work from your bedroom or the couch, as these can trigger the brain into thinking it is time to sleep or relax.

Avoid those distractions

In your own home it can be so easy to get distracted by your surroundings. This makes it difficult to switch off from household chores or slipping into weekend habits.

If you find yourself getting distracted on a regular basis, it can help to set yourself a clear list of deadlines and hold yourself to account for meeting them all. Avoid switching on the TV, and instead put on the radio or a calming playlist. This will provide some background noise for those who don’t enjoy the silence.

Combat the loneliness

If you’re the only person working from home, the long hours by yourself can often leave you feeling isolated and lonely. Whilst instant messaging apps mean you can communicate to your colleagues whenever, it’s never the same as having face-to-face interaction.

If you can, try using video calls with colleagues and clients wherever possible, as this provides a more social experience than sending emails or texts. This will play a key role in tackling feelings of isolation over the next few months as many people could be working from home for the foreseeable future.

But be aware that faulty technology can sometimes lead to lagging and frustrating meetings, so make sure you give yourself enough time to set up and get ready before the call.

Cultivate compassion for yourself and others around you

For those self-isolating or working at home with a partner, your family, or your housemate, it’s important to be mindful of your own needs and the needs of others. Spending long periods of time in a shared space can be tricky, but there are ways around this that will make it easier to maintain healthy relationships. Talk to each other, be open and honest, and make a plan together that takes into account everyone’s needs. You're less likely to experience feelings of resentment if you’re communicating clearly.

By talking to one another and addressing any issues as they happen, you can express how you feel and talk about the challenges you may be facing. If you need more space to work or think, explain why this is important to you, and work on a solution together. It might help to start by telling them how much they mean to you and reminding them that you care.

It can be difficult to maintain a work-life blend when the lines between work and home are blurred into one. Make sure you stick to your working hours and try not to let work infiltrate your evenings or weekends. It might sound silly but having a good morning routine and wearing ‘work’ clothes, or just not your pyjamas, can help to create a professional mind-set. Ultimately, you need to find a way of working that serves you and results in the least amount of disruption. Be kind to yourself while you find a new rhythm and allow yourself enough time to adjust.

 

19 March

Bank of England cuts interest rates to lowest level in history

The Bank of England (BoE) has cut interest rates to 0.1%, the lowest level in history, in response to the COVID-19 pandemic.

In a special meeting held today (19 March) the monetary Policy Committee unanimously voted to increase the BoE’s holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by £200 billion to a total of £645 billion, financed by the issuance of central bank reserves, and to reduce Bank Rate by 15 basis points to 0.1%.

 

Call for HMRC to immediately pause tax collections

The spread of COVID-19 has caused much uncertainty for businesses around the world, with many fearing for their future stability. Many governments have detailed a range of measures to help keep businesses afloat and to protect the economy. However, it is still unclear if these measures will go far enough.

Accounting and tax advisory firm Blick Rothenberg partner Alex Altmann has called for the UK’s HMRC to immediately pause tax collections to keep businesses liquid. He said: “Supply and demand are the core principles of a working economy, which are now heavily disrupted by Governments responses globally to tackle the crisis. The announcement by the UK Government to provide £330bn in loan guarantees will play an essential part of a long-term rescue package, but no one knows today how this money will get out of the door. What we need now are quick and direct cash injections into the economy.

“The Government’s announcement for a 12-months business rate holiday is a first step. However, businesses pay large amounts of VAT, PAYE and Corporation tax on a regular basis as well. Pausing tax collections now is existential for businesses to maintain their liquidity and provides the necessary relief to pay workers and keep the business running.

“At this stage it does not make sense to collect large amounts of taxes from businesses, which are often based on assessments and assumptions made earlier in the tax year. If the Government wants to achieve a fast and unbureaucratic way to keep businesses liquid, it should follow the measures introduced by other European Governments this week and pause the collection of direct taxes, like Corporation Tax or PAYE, for the foreseeable future.

He concluded: “For example, the German Government announced on Tuesday, with an unprecedented package of measures, that it would pause any tax collections on application and provide for fast-track tax refund processing. We need to help businesses in the same way as otherwise they will run out of cash very quickly, which risks losing hundreds of thousands, if not millions, of jobs."

 

 

18 March 

Reactions to UK’s IR35 delay

Following the announcement by the UK government yesterday that IR35 is to be delayed, TA has covered some of the reactions below.

Association of Accounting Technicians tax policy expert Brian Pamer said: "Whilst this delay to the implementation of off-payroll working rules may help to reduce the impact on individuals whose businesses and careers have been adversely affected due to coronavirus (Covid-19), for many it simply comes too late.

“However, as we have previously commented, we hope that there will still be a 'soft landing' period following the implementation in April 2021 and that the government will take this into account as part of the changes to implementation following a review as announced in the Budget last week.

“This would provide much-needed reassurance to employers or contractors who have taken reasonable steps to comply but get something wrong, as well as those recovering from the effects of Covid-19, that HMRC will not be pursuing them with fines and penalties at what is likely to be a particularly difficult time."

BDO UK partner and head of employment tax Stephanie Wilson said: “This 12 month delay will be viewed as a blessing to some and a potential frustration to others but the government have made it clear that this is a deferral in response to COVID-19 intended to help both businesses and individuals, not a cancellation.

“Work undertaken to date by businesses is not wasted and many businesses will still choose to make a policy decision to implement changes and review their contractor population before April 2021, now with some additional time to revisit and refine. For those behind the curve, a panic response is no longer necessary: there is time to pause, reconsider and plan to get it right at the first time of asking."

 

R3 view on UK Chancellor’s COVID-19 measures

Duncan Swift, President of insolvency and restructuring trade body R3, responds to the measures announced on March 17 by the Chancellor of the Exchequer, Rishi Sunak MP, to support businesses during the COVID-19 outbreak:

“The Chancellor’s ‘Whatever It Takes’ strategy is the right one, but businesses do need help now, and other types of help are needed alongside the additional access to finance.”

“Feedback from our membership is that otherwise healthy businesses are already experiencing a cash flow crisis. Many businesses will face insolvency without significant creditor forbearance or direct help from Government to bridge the gap in their finances. It’ll be expensive, but Government intervention is needed to weather the storm. As well as additional money going in to businesses, payment holidays for businesses on things like PAYE, NICs, or other taxes will help manage outgoings, too. The focus on loans could store up problems later: these loans will need to be paid back. Grants for small businesses will help, but larger businesses aren’t immune to the impact of COVID-19.”

“The first step any business in difficulty should take is to seek professional advice. There are options out there. Speaking to creditors will also be key, and the earlier businesses do this, the earlier they may be able to rearrange payment terms.”

 

COVID 19 - Accountancy CEO question time  

Zoya Malik, Group Editor, International Accounting Bulletin put some quick fire questions to Graeme Gordon, CEO, Praxity on COVID-9’s impact on business operations 

What is Praxity doing to assess new Covid-19 developments to advise member firms to help them reduce risk? 

We are remote working whenever and wherever possible, but with offices manned by one individual, or on a rota basis, and we are antiseptic cleaning at least twice a week. Individuals are carrying in their own antiseptic wipes for personal use daily.

What is the plan to meet member firms and clients due to cancelled events? 

We will be deferring where possible, and cancelling meetings where not. 

What is replacing events and how do you intend to knowledge share? 

Nothing is viable for the size of our events, but the use of systems like “Zoom” and Microsoft Team, allows collaborations to progress.

Which of your member firms' markets are currently operating under lock-down? 

Most are under remote working, thus “lock-down”

How are they managing to operate?

It’s difficult as it’s the unknown, with various different ways in which governments are dealing with the problem.

What channels are in place to knowledge-share amongst member firms in terms of the impact of COVID -19 on their business and their response plans for continuing to serve clients?

We are using electronic interaction. So far this is working for us.

 

 

17 March

CABA to take ‘business as usual’ approach in relation to COVID-19

CABA, a UK charity which supports the wellbeing of accountants and their families, is to take a ‘business as usual approach’ in relation to the spread of COVID-19 and will continue to provide its support services.

To ensure the safety and wellbeing of its staff and members, CABA has introduced several preventative measures to mitigate the risk of infection. This includes postponing face-to-face training and conducting services online or over the phone.

CABA has urged all members experiencing anxiety related to COVID-19 to contact the charity. It has also encouraged small business owners looking for financial or wellbeing advice to get in contact for support.

CABA services director Kelly Feehan said: “Amid all of the change and uncertainty caused by Covid-19, here at CABA we want to reassure our members that we are open, and we are here to provide as much support and advice as possible.

“The spread of the virus has undoubtedly stirred up a lot of emotion, and even financial stress. Therefore, it’s completely natural to feel anxious and concerned for yourselves and your families, and your business - so our dedicated team is on hand 24/7.

“We strongly urge anyone experiencing anxiety to get in contact with us. Even if you’re having to self-isolate - you’re not alone, we’re just at the end of the phone.”

BDO UK urges UK Government to act as insurer of last resort for leisure sector

Following the UK Prime Minister Boris Johnson’s press conference yesterday which advised the public to avoid pubs, restaurants, and theatres, BDO UK has called on the Government to consider acting as the insurer of last resort for the leisure sector.

While Johnson announced the need for more social distancing on a voluntary basis, he did not call for a complete shutdown of these type of businesses.

BDO corporate finance partner Peter Hemington said: “While the measures announced in the budget to help businesses through the COVID-19 emergency were welcome, they did not go nearly far enough. Very few businesses have cash reserves available to get through a likely two to three month shutdown, so the majority will struggle severely unless drastic action is taken”.

“The government has a tried and tested role as an insurer of last resort. It must adopt that role now by offering businesses impacted by the coming Coronavirus shutdown insurance against their reasonable losses incurred in the coming months.”

 

IFRS Foundation makes changes to upcoming meetings

Due to the spread of COVID-19 in the UK, the IFRS Foundation’ March CMAC meeting is to be held remotely for all participants.

The Foundation has already made a number of its upcoming meetings available remotely. Updates to scheduled meetings and events can be found here.

The Foundation has also closed its London office and all staff are to work from home, following advice given by UK Prime Minister Boris Johnson yesterday instructing UK workers to work from home were possible.

 

16 March 

UK’s FRC provides updated guidance in relation to COVID-19

The UK’s Financial Reporting Council (FRC) has updated its guidance in relation to the COVID-19 pandemic.

COVID-19 has caused much uncertainty for many companies’ future operations which in turn has consequences for those proposing to report results in the coming months, as well as for their auditors.

Some companies and auditors are facing practical difficulties in preparing accounts and carrying out audits. Given restrictions on travel, meetings, and access to company sites in some jurisdictions, audit firms may need to consider developing alternative procedures to gather sufficient and appropriate audit evidence.

The FRC has expressed its concern that the current situation should not undermine the delivery of high-quality audits and has said audits should continue to comply fully with required standards.

However, the regulator noted that additional time may be required to complete audits and it is important that this is taken, even at the risk of delaying company reporting.

Auditors will need to consider the impact of COVID-19 on:

How they gather sufficient, appropriate audit evidence, recognising that the planned audit approach may need to change and alternative procedures developed;

How the group auditor proposes to review the work of component auditors;

The auditor’s assessment of going concern and the prospects of an audited company;

The adequacy of disclosures made by management about the impact of COVID-19 on the company;

  • The need for the auditor to reassess key aspects of their audit as a result of the fast-changing situation, which may require management to provide further evidence.
  • Auditors will need to engage with the entities they audit to ensure they set clear expectations as to the level of disclosure they expect to see in annual reports to communicate the impact and risk of COVID-19 on the company.
  • Companies also need to understand that it is vital auditors have sufficient time and support to carry out their work to a high standard, including reassessing work done to reflect changed circumstances. In some cases, companies may need to reconsider their reporting deadlines.

FRC executive director of supervision David Rule said: “Given the growing impact of coronavirus on the global economy and the high degree of uncertainty, high-quality audits are vital to ensure users of financial statements are properly informed.

“In many instances, auditors will need to consider developing alternative audit procedures to gather sufficient, appropriate audit evidence.

He concluded: “The FRC remains in close discussions with the largest audit firms to ensure any issues are being appropriately managed.”

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