While the global spread of the coronavirus is having a significant impact on both organisations and individuals, knowing how to reduce risks is key.
The dynamic nature of the spread of COVID-19 and the uncertain developments ahead of us are creating difficulties for all of us. Along with its effects on people, the coronavirus is rapidly disrupting business and consumer activity in all kinds of areas.
With more risks arising, such as cyberattacks, cashflow challenges, concerns over the resilience of primary service providers, project delays and struggles with maintaining levels of services and supply, organising your business well and taking the right actions is key.
To help you, we have created an overview of scenarios, suggested activities and guiding questions.
The impact of the current uncertainty on business is complex. Adequately reflecting the impact on periodic financial statements is a key element of communications to stakeholders. For listed companies, for which capital market rules have not been relaxed, it is important to maintain compliance with regulations and consider the need for additional communication.
Organisations in regulated industries need to follow regulatory requirements and honour their commitments, despite the impact of COVID-19. At the same time, compliance organisations may be experiencing restrictions in terms of working remotely, reduced workforces, technical disruptions or increased volumes.
In response to the coronavirus, many companies have allowed their employees to work remotely and have therefore increased or set up the required IT infrastructure. Unfortunately, this also provides a good opportunity for hackers to attack your IT infrastructure.
Due to the current global crisis of COVID-19 business operations are critically impacted. Especially in the project management area these circumstances might delay decisions which can lead to overspending and wrong resource allocation. The consequences are higher costs and potential unsuccessful go-live.
Risk management functions are at the heart of current crisis management efforts. The board of directors, management, regulators, clients, and other stakeholders expect an up-to-date view of the risks the company is exposed to and the effectiveness of the measures taken. Timely risk information and reporting is critical to enable timely decision-making and has been an issue in crises in the past.
Organisations that are typically dependent on their vendors’ and suppliers’ ability to deliver in compliance with their requirements are likely to be affected as third-party providers may be dealing with issues related to remote working, supply chain interruptions, distribution delays, service level instability and many other potential developments.
The impact of COVID-19 on business is devastating, and internal audit is no exception. The virus is preventing many internal auditors from conducting audits on-site due to travel restrictions. Others are seeing resource shortfalls due to team members becoming ill. As the duration of this crisis is still unknown, a number of critical areas will need special attention.
Cash is extremely important, particularly during these special times. Ideally, you should focus on identifying all short-term (and longer-term) actions that can be taken in relation to your accounts receivable, accounts payable and inventory to protect your cash positions, but also on collecting sufficient liquidity to keep your operations running and ultimately to survive.
Director, Risk, Compliance, Internal Audit, Financial Services, PwC Switzerland
Tel: +41 58 792 46 28
Partner and Advisory Services Leader, PwC Switzerland
Tel: +41 58 792 16 13