Accountancy Profession During the Pandemic

Everywhere I turn, I hear the very real and also very bad news coming from the

COVID-19 pandemic. The crisis has delivered painful and sobering impacts. From

CPA candidates to tax preparers, small businesses and large, the profession has seen

significant ramifications due to the COVID-19 pandemic.  With the economy reeling from

the coronavirus pandemic, accountants find themselves in an unprecedented position to

help create a new normal for both themselves and their clients. 

For those in public practice, CPA firms are not only helping their clients but their

own practices to stay viable. Meaning, what CPAs are learning to help their clients

minimize loss and expedite financial recovery is also helping their firms stay

economically viable by using the same actions. Another challenge CPAs in public

practice face is showing more value to their clients in these times of crisis — thus the

importance of remaining calm, objective and open-minded and helping their clients with

the new opportunities that the government economic programs could offer their

organizations.

This is always the hardest time of year for accountants, and it’s not unusual for

members to be working 70 to 80 hours a week during a normal busy season. COVID-

19 has added new challenges to an already busy time, which has made this tax season

more complex for both accountants and their clients. Specifically, accountants have

had to quickly pivot to become experts on rapidly changing information and legislation,

so they can advise clients at a time when their guidance is needed the most.
 Most of the accountants have the technology to work remotely, but they are not

set up to do so seamlessly. I picture an accountant at the office with top-of-the-line

printers and scanners and two or three large monitors. Now, I picture that same

accountant at home with their kids, partners and roommates doing the same work on a

laptop and home all-in-one printer/scanner. It’s not the same situation, but accountants

have had to adjust quickly to their new, temporary working environments. Adding to

this, accountants can’t meet face to face with clients right now, with many relying on

video meetings or phone calls in its place, so the client relationship has also had to

adapt to this changing time.

While the long-term impact of this situation has yet to be seen, accountants who

are in a niche that is disproportionately impacted by the virus may suffer if those clients

go out of business. At the very least, these clients may have short-term issues around

viability and ability to pay their bills, so accountants need to prepare to handle those

situations.

Traditional approaches cannot do enough to prepare for a pandemic. The rapidly

evolving threat around the COVID-19 virus, commonly referred to as coronavirus, is

impacting the business and investor community across the world. The global and

interconnected nature of today’s business environment poses serious risk of disruption

of global supply chains that can result in significant loss of revenue and adversely

impact global economies. Chances are, previously completed engagement planning

and risk assessment procedures did not address COVID-19 or the risk of a pandemic in

general. New circumstances have arisen that necessitate a reassessment of, and likely,

modifications to, a CPA firm’s planned approach.

 Firms should consider the impact of COVID-19 on a client’s business, especially

the impact on financial statement amounts that require judgment or estimation, such as

asset valuations or revenue recognition. Additional disclosures, such as going concern

and/or risks and uncertainties, or modifications to the CPA firm’s report may be

necessary. If a client’s business fails at a later date, lenders and investors may be

quick to blame the CPA firm for their lost investment, especially if, in hindsight,

disclosure was inadequate, or the firm failed to detect a misstatement in the financial

statements.

Accommodations may be required for clients with upcoming fiscal year ends. For

example, it may no longer be considered “safe” to perform physical inventories, and

fraud inquiries may need to be performed virtually. If both the client and engagement

team are working remotely, how will evidence be gathered and tested? Assess

engagement plans to determine if modifications are required in order to comply with

professional standards. Discuss modifications with the client as the engagement fee or

realization may also be impacted.

For many firms, consulting projects, including tax consulting, may be modified,

postponed, or even ceased to enable clients to conserve cash flow. Address the status

of consulting engagements proactively. If necessary, secure updated engagement

letters or other written communication with the client detailing any modifications to

scope. If services are temporarily halted, postponed, or cease altogether, confirm this

in writing with the client.

As the stability of the economy becomes less certain, lenders may be more

aggressive in requiring a CPA’s confirmation of certain information, such as the impact

of COVID-19 on a client’s business, when credit is extended, or terms are modified. It is

generally not appropriate or recommended to respond to most requests made by

lenders. Doing so creates additional risk to the firm and is generally not supported by

the services delivered to the client. 

As this pandemic continues to impact almost every part of our lives, there are

going to be major opportunities for existing brands and new startup companies that will

leverage either an opportunistic or a longer-term opportunity. 

Pickup and Delivery – With all types of businesses finding ways to reach their

customers doorstep, delivery solutions are becoming a life-savior. And for this reason,

delivery services have observed a surge in their business amid the coronavirus crisis. 

The Hills states, “A changing economy means new opportunities, especially for delivery

services.” Regardless of the business size & type, there is a need for a robust delivery

management solution.

Online Education App – Educational institutions around the world are forced to

shut down and shift to online learning programs. This crisis has definitely triggered an

online boom for education industry. As per the stats, education app downloads spiked

in March 2020, increasing nearly 300%. While it is helping to cope with the current

emergency, it is also preparing the world for the next future. It is a great idea to build a

trusted platform for learning.

Grocery Delivery – The fear of getting exposed to the pandemic keeps people

from going to offline grocery stores. While the stock in their homes doesn’t seem to be

lasting for longer now, they are ordering it online. It is the major reason for the

exponential rise in number of downloads for grocery delivery apps in the recent days.  
Take the grocery store online to ensure timely delivery of grocery orders at customers’

doorstep.

Medicine Delivery – At this moment, pharmaceutical businesses have an

essential role to play. People quarantining themselves find it difficult to reach medical

stores. Not only those affected by the virus, but others who are dealing with minor or

major health issues, are failing to get medicines on time. Hence, it becomes the

responsibility of pharmacy businesses to contribute in the fight against Coronavirus.

With a right tech partner by the business side, it can switch to an online medicine

delivery business in just a few weeks.

Ecommerce Marketplace – In the hurricane of Coronavirus spread, it is very

difficult for brick and mortar businesses to find their sustainability in the market.

Thankfully, the digital world has a solution to this problem. Businesses have a golden

opportunity to expand their customer reach by going online and boost their sales.  

Taking the ecommerce business online, it can enable contactless commerce deliveries

now.

Food Delivery – Several restaurants had to shut their shutters after the

government ordered an enforced lockdown. Waiting for the situation to get back to

normal seems no longer a good option for them. But switching to online delivery

sounds certainly perfect. As per The Guardian, food delivery services thrive, as

consumers opt to stay in to avoid the spread of contagious diseases.  Launch the

branded food delivery app to enable the customers order food online and delight them

with contactless deliveries.

 This is an unprecedented time for the entire business world. While there’s no

slew of tried-and-true best practices for dealing with this global pandemic, the key to

managing any crisis is preparation. Here are seven actions that an entrepreneur can

take to ensure his organization is in the best shape possible to withstand what’s ahead.

Review workforce locations and travel.  The first priority is to establish exactly

where staff are and how many workers are in affected or vulnerable territories.

Upcoming travel plans will need to be reviewed, rescheduled, or canceled.

Revisit the crisis and continuity plans.  Every well-run business has a crisis or

continuity plan, and many will have a specific pandemic plan. But nothing tests theory

quite like reality. Generic plans need to be adapted and tailored to cope with the

specific challenges of an epidemic.

Evaluate the supply chain.  A clear understanding of the supply chain will help to

expose any potential vulnerabilities. This means beginning with the most critical

products and looking well beyond first- and second-tier suppliers, right down to the raw

materials, if possible. Contingency plans can run into difficulty quickly if the virus

spreads.

Identify potential points of failure.  Who are the teams and individuals on whom

critical processes or services depend? Are there workers with the right skills who could

step into critical roles if needed? Call centers and shared service centers are potentially

vulnerable if the virus continues to spread — can steps be taken to reduce the level of

human interaction, such as staggered shifts or remote working?

Get communication right.  Although we’ve seen employers work hard to keep

their workforce informed, disinformation and confusion have spread along with the virus.
Employees will be looking for reassurance from owners that they are being protected

and that the business is prepared. Leadership should be seen as a source of truth —

and according to the 2020 Edelman Trust Barometer, business is more trusted than

both government and the media. Consistency and accuracy of messaging is the key, as

is reassurance from the top of the organization; the workforce will need to know that

their welfare is paramount.

Use scenario analysis.  With uncertainty rife, and COVID-19 holding the potential

to impact every part of a business for months, scenario planning is a critical tool to test

preparedness. What are the best- and worst-case scenarios, and is the business

equipped to cope? What could be the impact in the longer term? Organizations in

some sectors could see a significant rise in demand if more of the population is

spending more time at home rather than at work — are they prepared for this?  

Supermarkets are reducing the variety of products, stocking up on staples, and

developing contingency plans.

Don’t lose sight of other risks.  COVID-19 isn’t the only threat on the horizon —

and often organizations are at their most vulnerable when dealing with a crisis that

dominates their attention. The many other risks that the business faces aren’t

diminished by an epidemic. Cybersecurity, for example, should always be top of mind.

Employees pay heightened attention to their leaders in times of crisis. They look

to the leader for reassurance and next steps. With emotions running high, and stress

and fear at the forefront, leaders must control the chaos, project honesty, empathy and

confidence, be decisive and take quick action and effectively communicate with purpose
and timeliness. It is only possible to begin a crisis action plan if everyone involved is

focused and on the task at hand.

Many organizations are offering limited work from home or have gone 100%

remote for the first time, and their leaders are facing a new reality — leading their teams

from afar. Leaders who are new to or have less experience leading hybrid remote or

fully remote teams are finding this new reality daunting. So how do a leader respond in

real time to a crisis like the worldwide spread of the new coronavirus?

Mental readiness.  Before a debacle occurs, a leader should

be psychologically ready, which is a finely tuned state of preparing his self to how to

handle a cataclysm. The foremost mistake that leaders make is they are not mentally

ready when the crisis happens. When it does, a leader must be able to contain panic

quickly because panic leads to bad decision-making and sometimes to paralysis. A

leader should also be able to avoid reactivity or blaming others for the mishap, both

common blunders. And he must be humble. Arrogance is a toxic leadership trait in a

crisis.

Team-building skills.  During a crisis, a leader must also surround his self with

the right people and people he trusts — and he need to figure out in advance who those

people are. Make sure that he is working with other leaders within the organization to

develop a strategic plan and communicate regularly amongst the team to adhere to the

strategy.

Analytical and decision-making skills.  In a catastrophe, company leaders will be

bombarded with information, some of it speculative, inaccurate, or conflicting. A leader

will need good analytical skills to make sense of this noise, and he often naturally
assume this role. He must identify what is true, what is important, and what the

implications of that information are in order to guide decision-making. Also, he should

have solid organizational and decision-making skills so he can help his company avoid

confusion and take the best course of action. The worst decision is no action at all.

Then he will find the crisis managing him, rather than he, managing the crisis.

Emotional intelligence.  During a crisis, it's vital that a leader express empathy for

stakeholders and have an ability to see the situation from their perspectives. Also, he

should mindfully listen to the rest of the crisis management team to understand others'

points of view. He can't learn these skills through training necessarily, but if he is not

empathetic or a good listener, help identify someone on his internal crisis management

team who best owns this skill.

Communication expertise.  Leaders, particularly CEOs and CFOs, must

communicate effectively to stakeholders and the public to help influence the course of

action following a crisis and to ensure the company's voice is being heard. News

spreads fast, thanks in part to social media. In all crises, communication is half of the

solution. The other half of the solution is fixing whatever has gone wrong.

Establishing goodwill.  Relationship building — with employees, shareholders,

and clients — is crucial for managers and leaders. Place strong emphasis on

establishing amity, accord, and support with those stakeholders who matter the most. A

leader needs to set up a bank of goodwill in good times, to draw on when a crisis hits —

and the best leaders know that.

 I truly believe that there will be a solution to this pandemic very soon. The world

will be a healthier and safer place once again. And the businesses will be gaining their

momentum again, specially, in Accounting Profession during the Pandemic.

Prepared by: Villena, Divina Victoria C., BSA5A

Submitted to: Dr. Rey Fernan G. Refozar, CPA, MBA