| Pub. Date | : Jan, 2022 |
|---|---|
| Product Name | : The IUP Journal of Accounting Research and Audit Practices |
| Product Type | : Article |
| Product Code | : IJARAP10122 |
| Author Name | : Ikram ul Haq* and Tahseen Anwer Arshi |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 11 |
Accuracy and transparency of financial reporting are compromised under conditions of crises and uncertainty. The disruption caused by Covid-19 presents a challenge to firms, regulators, auditors and investors to make meaningful conclusions about financial data. In the absence of clear guidelines, firms and regulators cannot present financial information with consistency and reliability. The study proposes a revised financial statement structure to address the limitations of financial reporting, particularly in the context of Covid-19. The conceptual paper utilizes secondary data and the researchers' expertise to propose a revised financial statement structure. The study finds a need to maintain the standards of financial reporting as per the International Accounting Standards Board (IASB) guidelines, with some changes to the immediate impact of Covid-19. The revised financial statement structure can promote transparency, consistency and reliability in reporting financial information, while keeping these standards. This study is one of the first papers to propose a revised financial statement structure to deal with the current Covid-19 crisis. The suggested modifications can be apportioned to Covid-19 issues, will be beneficial for users in decision making, and can be used to amend current reporting standards.
The Covid-19 pandemic has substantially interrupted economic activities across the globe and materially affected companies' performance (Carnevale and Hatak, 2020). According to one estimate by the Organization for Economic Cooperation and Development (OECD), the recent shutdowns may reduce economic output from 50 to 100%. The other main reason which has contributed to the drastic impact on economic activities is the exponential pace at which the virus has spread and uncertainty about the future turn of events as a result of the pandemic (Arun and Ozili, 2020).