Experts say that the Covid surge has caused disruption to working practices and changed resource demand suddenly.
And based on past experience, they feel, a lot of companies are not prepared or digitally sophisticated enough to successfully close year-end financials and complete the entire reporting process.
Especially hit are companies where some business locations are not reachable and accounting records cannot be accessed.
“The recent surge has taken everyone by surprise. It will be useful for companies to have more time to assess the impact of Covid on their businesses and the consequence of the impact on their financial results for the year ended March 31, 2021” says Ritesh Sanyal Of Deloitte India.
While some IT majors have released their results, a majority of companies are still in the process of collating information.
“While most mid to large audit firms and corporates are now accustomed to working remotely, an extension of deadlines may help some of the entities given the physical restrictions as well as actual Cover cases at both clients and auditors which may pose challenges in timely closing of accounts. Of course we will also need to see how the Covid situation evolves further,” said Nikhil Singhi, a partner at Singhi & Co.
A mail sent to SEBI did not elicit any response.
The surge in Covid is also impacting the tax filings, mainly indirect taxes, say industry trackers.
As per a letter written by LocalCircles, a social media platform, to the finance minister startups and MSMEs (micro, small and medium enterprises) are facing a lot of challenges in making GST payments and the date should be extended as well.
A survey done by LocalCircles earlier this week indicated that 80% of the Startups and MSMES want the Government to extend GST payment and filing deadline without penalty for months of March, April and May to June 30th, 2021,” Sachin Taparia, Chairman, LocalCircles wrote in the letter to the finance minister.
Experts feel that the timeline for audited year end results should be extended from current May 30, 2021 to June 30, 2021 or it should coincide with the reporting timeline of August 15—applicable for the first quarter of FY 2021-22.
Given the impact the second Covid wave will have on companies, auditors and stakeholders also want qualitative disclosures of indicative results to help understand a company’s resilience in the face of current uncertainty and gain more clarity on material risks.
Experts say that SEBI should ask for more information that would help stakeholders analyse company performance better, especially on issues like impairment of assets, appropriateness of going concern and reliance on alternate procedures with respect to inventory, property plant and equipment.
