Emre Ozdemir, Managing Partner (CEO), Kreston A&O, Switzerland

The COVID-19 crisis has highlighted what many of us have known for years: auditing is crucial to the smooth running of economy and society.

For many companies, the economic impacts of the pandemic and the lockdown in spring 2020 resulted in considerable liquidity problems and earning shortages. Some experienced liquidity bottlenecks immediately, because decreased sales no longer covered fixed costs.

The emergency legislation of the Federal Council (Bundesrat) provides the following tools to help the economy overcome these obstacles:

• State-warranted COVID-19 bridging loans (10% of revenues up to CHF 500,000), to partially cover fixed costs
  • Subject to certain conditions, including payout block (e.g. back-payment of loans or dividend distribution to shareholders)
• Compensation for short-term work, to cover personnel costs
  • Subject to no dismissal of personnel
• Temporary suspension of debt collection in case of over-indebtedness, to avoid bankruptcy.

As auditors, we have a central role to play in each of these measures, which have enabled many companies to survive the first wave of COVID-19 without further damage. We must monitor compliance with the criteria for emergency loans and short-term work compensation, and determine when balance sheet dumping is appropriate.

These are significant roles that carry a high level of responsibility, and companies may not always be aware of (or adequately reward) the extra work involved. Newer tasks like this are sometimes simply assigned to the auditors without a full appreciation of what's involved. From the auditor's perspective, the remit could increase the 'expectation gap', placing unrealistic demands on our time.

We are in the middle of the second wave, which inevitably means more lockdowns and similar disruptions. As remote working increases, we can expect a corresponding rise in cyber risks and compliance issues. We are progressively using completely new approaches in the digitalised data world (process mining, data analytics) and artificial intelligence (deep learning, machine learning processes). As auditors, we must consider the new risks and work more closely with the board of directors or management of our clients without jeopardising our independence.

However, the assessment of complex issues - such as the value of assets due to uncertain future business expectations - will continue to require the use of human intelligence, perhaps more than ever. In these uncertain times, deeper insight into the factors involved for a business involves more than just data processing. Only the combination of digital support and human interaction can provide the confidence and security necessary to sustain a growing economy.