Verifying companies’ financial statements remotely is putting further strain on external auditors already under pressure for failing to conduct basic checks and spot accounting issues. Auditors say counting inventory or company goods is tough when they can’t visit clients’ sites to assess inventory firsthand for months. PREVIEWSuch reviews of inventory and accounting estimates are necessary for auditors to give financial statements a clean bill of health, which public companies need to file their annual reports. Urban Outfitters’s auditors visited some of its stores and distribution centers for the usual inventory check after lockdowns eased. Lawyers, consultants and fellow external auditors also are providing guidance on how to avoid legal liability in cases when they failed to detect misstatements or fraud.

Source: Wall Street Journal September 01, 2020 09:34 UTC