Closing Out the Books Remotely
There is a great article by Mark Maurer in the WSJ today about how the Coronavirus pandemic is forcing firms to close out first quarter books remotely. The audit seems to be the biggest hurdle. Intuitively, this makes sense given that the audit is conducted by a third party whereas closing the books is completed by in-house finance. An auditor’s systems are a larger degree removed from operational reporting than internal finance, which could make remote work more difficult.
The article goes on to discuss some adaptations which demonstrate the SEC and the market are aware of difficulties. The SEC extended the filing periods for certain note disclosures for 45-days and the market is pricing uncertainty into equity. Based on a comment by the CFO of J&J, the SEC also has been working with firms to ensure a mutual understanding of materiality given that certain layers of reporting may not be possible to execute.
As a thought exercise, how would the above paragraphs read in a pre-Sarbanes-Oxley world?