Coronavirus (COVID-19) Disclosure Considerations and Developments
By George Wilson
Disclosure considerations for risks and impacts of the Coronavirus are evolving at a fast pace. On February 19, 2020, the SEC Chairman, CorpFin Director and Chief Accountant and the PCAOB Chairman issued a Statement addressing reporting considerations and potential reporting relief about this rapidly evolving situation. (The Statement also addresses certain multinational auditing considerations.) The Statement includes this suggestion:
“we urge issuers to work with their audit committees and auditors to ensure that their financial reporting, auditing and review processes are as robust as practicable in light of the circumstances in meeting the applicable requirements."
The Statement also specifically mentions subsequent event disclosure considerations.
Another resource that companies may find valuable is this memo from Nelson Mullins which addresses areas beyond financial reporting, including:
- the SEC’s forward-looking disclosure obligations and decision-making matrix when outcomes are uncertain but a known trend or uncertainty will be (or is “likely to cause” under the proposed SEC rules issued January 30, 2020) a material change
- selected disclosure considerations by industry
- environmental, social and governance (“ESG”) considerations
- the role Board members and executives have in SEC disclosure
- enhanced labor and employment law, data privacy and cybersecurity considerations
As always, your thoughts and comments are welcome!