Knowledge and Insights

Internal Control Considerations During a Pandemic

Much has changed for businesses since the COVID-19 pandemic began almost a year ago in March 2020.  One of the biggest changes has been the introduction of remote working in the business environment.  Remote working has provided many unanticipated benefits, like more time with the family and less time commuting. While there are benefits to the remote work environment, it presents challenges as well. One of the biggest challenges working remotely is its impact on an organization’s internal controls, particularly over financial reporting.

Internal controls consist of five key components: the control environment, risk assessment, control activities, information and communication, and monitoring activities.  Effective internal controls related to financial reporting allow an organization to accurately capture and report financial information on a timely basis. As organizations transitioned to a remote work environment, or a hybrid in-office work schedule, responsibilities shifted between individuals, new procedures were implemented, or some historical procedures were discontinued.  Most of these changes were made out of necessity to continue operations in the “new normal”, however, these changes could have unintended consequences.

An organization’s management should consider the impact of any changes made to its internal controls to determine if the necessary segregation of duties and approval processes are in place.  Is there still the same comfort level as there was in the past that transactions are being properly approved and recorded?  Is your organization in a position to continue to accurately record financial information as the work environment shifts between in-person and remote working?  Do your controls facilitate the process of maintaining supporting documentation for these transactions?

Mercadien has extensive experience in evaluating internal controls to identify strengths and areas for improvement to help you mitigate risk in your organization.  If you feel as though you would benefit from a review of your internal control structure, whether due to changes made as a result of the COVID-19 pandemic, or just to ensure you are implementing effective controls, please do not hesitate to contact me at or 609-689-2359.

DISCLAIMER: This advisory resource is for general information purposes only. It does not constitute business or tax advice and may not be used and relied upon as a substitute for business or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified accountant, tax practitioner or attorney licensed to practice in the jurisdiction where that advice is sought.