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Accounting and the Corona Virus

The corona virus is certainly altering my life. I am in California between semesters but have been told not to return to school until further notice. My return flight was cancelled by the airline so it may have been difficult to return anyway. The crisis is likely to create a lot of accounting woes for Chinese companies. It already seems to be having a negative effect on markets.

It is Chinese New Year holiday time, so most companies staff took last week off and most have been ordered to take off this week. Some companies, including most of the Big Four, have told staff to work from home this coming week.

Annual reports for public companies are normally due early in the year. The US Securities and Exchange Commission requires Form 20F to be filed for calendar year companies by April 30. The Hong Kong Stock Exchange due date for these companies is March 31. The Shanghai Stock Exchange has already extended the due date to April 30.

In a normal year, the preparation of accounts by companies and audit by independent accountants follows a furious pace once people return from the New Year holiday. Since most companies are delaying the return of employees this year it may prove difficult to get annual reports out on time this year.

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