Please see our updated post here.
The SEC, together with the PCAOB, recently updated guidance to reporting companies on issues arising from the coronavirus (COVID-19) outbreak. On February 19, 2020, SEC Chairman Clayton, PCAOB Chairman William Duhnke, and senior members of the SEC staff advised that, while specific analysis of the impact of the coronavirus may not be feasible, information about a company’s plan and response to its outbreak could be material and may need to be disclosed. That advice referred to the effect of the outbreak on the audit process and financial reporting. The SEC also updated its guidance to companies for evaluating general disclosure and reporting requirements in light of the quickly developing coronavirus situation.
U.S. listed companies with significant operations in China and other affected areas, whether based in those areas or not, may be affected by the continued spread of the coronavirus. The SEC observed that companies that do not themselves have operations in affected areas, but who depend on suppliers, distributors, and/or customers in those areas, may suffer financial and operational impacts. The reactions of other countries to the spread of the coronavirus, including potential travel bans, can have adverse impacts on companies. The coronavirus can affect the availability, timeliness and accuracy of financial information necessary for financial disclosures. This could then affect the quality of any financial audit.
Your regular Locke Lord contact and any of the authors would be happy to assist you with these matters.
Visit our COVID-19 Resource Center often for up-to-date information to help you stay informed of the legal issues related to COVID-19.
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