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PRESENTATION OF THE CORONAVIRUS PANDEMIC IN FINANCIAL STATEMENTS OF ENTITIES FOR THE YEAR 2019 AND PREVENTION OF FRAUD
Abstract
The purpose of the article „Presentation of the Coronavirus pandemic in financial statements of entities for the year 2019 and prevention of fraud“ is to substantiate the possible options for reflecting the effects of COVID-19 in the financial statements for 2019 and to suggest preventive measures against fraud. In this connection, the Coronavirus pandemic is defined as a material, non-adjusting event for the financial statements as at 31.12.2019. This is to be disclosed in the notes, if management has approved the financial statements after a state of emergency has been declared. In conditions of uncertainty, the risks of fraud increase through the information in the disclosures. Possible areas in this direction under the conditions of such subsequent non-corrective events are the impairment of assets, investments, charitable donations and others. The research methodology is based on a systematic approach with appropriate methodological tools for analyzing, summarizing and illustrating the achieved results. An empirical study of the presentation of the Coronavirus pandemic in the financial statements for 2019 of non-financial corporate issuers on the Bulgarian Stock Exchange was made. The established results are relevant for disclosure of the subsequent non-correcting even, according to the applicable accounting framework - International Financial Reporting Standards (IFRS), the expected effects on the activities as a reduction of revenues, difficulties with liquidity and resource provision, delay of investments and the measures undertaken for their reduction. No disclosures were found about possible areas of fraud through the information in the financial statements. The content of the study is useful for potential investors who are interested in non-financial corporate issuers on the Bulgarian Stock Exchange. It provides important knowledge about the understanding of the information in the financial statements about subsequent events that have given rise to conditions of economic uncertainty.
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References16
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