The financial reporting implications of COVID-19 on Maltese listed companies

Abstract

Purpose: The aim of this study is to identify and explore the financial reporting implications of COVID-19 within the context of Maltese listed companies and to examine how such financial reporting implications, if any, were addressed. Design: The research objectives have been satisfied through 10 semi-structured interviews with high-ranking officials of Maltese listed companies and a content analysis of their annual reports. Findings: The findings were based on 12 accounting standards and revealed some changes in the financial reporting of the Maltese listed companies interviewed. The companies face a high level of uncertainty about the impact and duration of COVID-19 on their operations. The research findings indicate that, during COVID-19, Maltese listed companies were mostly impacted with respect to IAS 1, IAS 10, IAS 20, IAS 40, and IFRS 16. More detailed disclosures were required from preparers, such as, of the going concern assumption. Discussions and debates with the Boards, external auditors and professional associations have helped Maltese listed companies to overcome the challenges faced in financial reporting. Conclusions: This study concludes that COVID-19 impacted several industries to different extents. Travel bans, lockdowns, and other mandatory restrictions had a significant impact on the companies' revenue streams and operations which subsequently led to changes in their finacial reporting. Nonetheless, the listed companies demonstrated their resilience throughout the pandemic. Value: This study sheds light on the impact of the coronavirus pandemic and the financial reporting challenges it has created. By suggesting possible areas of improvement, this study aims to improve the resilience of Maltese companies against any other possible unexpected events.