Auditing in the time of COVID – the impact of COVID-19 on auditing in New Zealand and subsequent reforms

Abstract

Purpose

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.

Design/methodology/approach

The authors use published sources to discuss the impact of COVID-19 on auditing, and potential reforms.

Findings

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.

Research limitations/implications

Limitations include the ongoing nature of the COVID-19 crisis. Further effects may yet eventuate.

Practical implications

Financial report users and auditors should anticipate changes.

Originality/value

This paper provides early evidence of the impact of COVID-19 on New Zealand auditing and predicts changes to the regulation of auditing.

Citation

Hay, D., Shires, K. and Van Dyk, D. (2021), "Auditing in the time of COVID – the impact of COVID-19 on auditing in New Zealand and subsequent reforms", Pacific Accounting Review, Vol. 33 No. 2, pp. 179-188. https://doi.org/10.1108/PAR-09-2020-0155