Covid Fallout Threatens Financial Reporting Guardrails, CFOs Say

The economic blow and staff reductions suffered by companies in the wake of the pandemic are straining safeguards critical to accurate financial reporting, Financial Executives International warned Thursday.

If left unchecked, lapses in internal controls for financial reporting could delay quarterly and annual reports and lead to a spike in material weakness disclosures—a red flag for investors, the group said in a report highlighting an increased risk of accounting and financial reporting errors in the coming quarters.

For many companies, new workflows stemming from the move to kitchens and basements, coupled with furloughed or reassigned staff, has left gaps in ...