France: Impact of COVID-19 on Auditing for 2020 Year Ends

Description of COVID-19 Crisis Context

The CNCC considered it necessary to recall in all statutory audit reports on 2020 accounts:

• Context of the crisis for business activities and financing
• Impact of the exceptional measures taken under the state of emergency on companies’ internal organisation and audit implementation.

Disagreement, Limitation, and Multiple Uncertainties

Due to the COVID-19 crisis, auditors might be led to formulate a qualified opinion, a disclaimer of opinion, or an adverse opinion in the following situations:

• Description or consideration of health crisis consequences in financial statements is incorrect.
• Scope limitation due to travel restrictions, inability to collect certain evidence or carry out satisfactory alternative procedures, inability to assess relevant assumptions used for certain accounting estimates, or insuffcient internal control.
• Multiple uncertainties whose impact on accounts cannot be clearly defined.

Going Concern Assumption

In the health crisis context, auditors must not deviate from applicable rules. They must assess an entity’s ability to continue as a going concern and determine if there are uncertainties related to significant events or circumstances.

Auditors’ Observations on Financial Statements

Auditors may, if necessary, make observations to draw readers’ attention to notes in the appendix that appropriately describe the COVID-19 crisis impact on annual activities and/or accounts.

Taking into Account the COVID-19 Crisis to Determine Audit Key Points

The CNCC believes that, given the seriousness of the COVID-19 pandemic, auditors may, in the audit key points area of the report, refer to the crisis as a particular context when describing the risk of significant anomalies or in response to identified risks.

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