Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


Evaluation of continuity impact under the Covid 19 pandemic, during the preparation of 2020 financial reports, and external auditors report of public limited shares companies in Jordan

Author(s): Nahed Habis Alrawashedh

From the start of the second quarter of 2020, the Covid-19 health crisis seriously undermined the growth engines of the world economy, making the exit from the crisis as complex as it is uncertain. Some developing countries, especially those in the MENA region, have been strongly affected by the disruptions induced by the covid-19 crisis, which disrupted the activities of companies leading to the closure of some of them, and to the implementation of extended social distancing measures. In addition, the effect of the volatility of financial markets, and the climate of uncertainty surrounding the persistence of the covid-19 epidemic in the region, make it difficult to declare the accounts of companies where a certain number of aspects related to financial information are affected by the health crisis. It is therefore important that entities provide sufficient information in the notes to the financial statements as well as information about the company that is useful to current and potential investors, lenders and other decision-making creditors. To answer this problem, a study based on a descriptive analysis was carried out on a sample of 35 limited share companies. These analyze show that 23% of the entities published financial reports in the first quarter of 2020 on time. A result which improved markedly over the next two quarters. Thus, the majority of the interim financial reports published by the Jordanian entities in our sample mention the impacts of covid-19 on the preparation of said reports as well as the impact on the turnover and profits of the companies. Various limited stock companies. This information must indeed appear in the reports to guarantee investors the availability of reliable data on the situation impacted by the health crisis. In addition, this information obtained can allow a careful assessment of cash flow projections for the next reporting season taking into account several scenarios. At the end of the analysis, one of the recommendations made is to include narrative information on how the various uncertainties encountered affected the estimates made and the strategy undertaken to deal with Covid-19.

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