The Influence of Crisis and External Events on Financial Reporting

This chapter offers a comprehensive overview of the influence of crises and adverse events on firm financial reporting. The operations of corporations were disrupted globally by adverse events such as COVID-19, with accounting departments experiencing shock waves. An adverse event is defined as the emergence or escalation of any incident that has a negative impact on companies, alters how firms function, or weakens the entire economy. A COVID-19 pandemic flare-up from 2019 to the middle of 2022 was considered a negative event since it resulted in a worldwide economic slowdown and significantly impacted enterprises’ day-to-day operations. The COVID-19 pandemic had a negative impact on businesses, education, the economy, transportation, and public health, prompting companies to change the way they typically present their financial data. Through corroboration of various literature sources, this chapter will reveal the influence of crises and external events on financial reporting. These actions helped companies take crucial steps in addressing the negative impacts of the COVID-19 epidemic. This chapter discusses how external events such as COVID-19 affected financial reporting. The first section of the chapter examines the COVID-19 epidemic and corporate financial reporting in general.