COVID-19 requires us to oversee, anticipate, and manage many risks and opportunities. Critical decisions need to be taken but limited time is available. You want to make sure you don’t oversee anything of importance and avoid blind spots.
These 19 COVID-19 risks can be used as a checklist by board and audit committee members, managers as well as risk and internal audit professionals, to help you assess the current risk landscape.
1. Fraud
What is the risk?
When virtual and remote working becomes the new standard, the fraud risk changes. New fraud scenario’s appear and existing controls might not be relevant or operating anymore. Remote working creates opportunities for phishing and CEO fraud.
Measures to consider?
2. Cyber
What is the risk?
Cybercrime increases and cybersecurity becomes more important when virtual and remote working become the new standard. Furthermore, the rise of online activity can result in an increased risk of data leaks.
Increased number of users utilizing BYOD could increase your information security vulnerabilities.
Measures to consider?
3. Risk & compliance culture
What is the risk?
Due to the changing work environment, it becomes more difficult to control compliant behavior. Soft controls have become more important than ever before.
Measures to consider?
4. New regulatory requirements & opportunities
What is the risk?
COVID-19 brings various regulatory changes impacting many industries resulting in trade restrictions, operational interruptions, economical compensation, data privacy issues, corporate disclosures and prosecutions.
Measures to consider?
5. Physical & mental health & safety
What is the risk?
Besides managing the obvious risk of infection, the current crisis also has an effect on the mental wellbeing of employees.
Measures to consider?
6. Contractual obligations
What is the risk?
It can be hard to fulfil some contractual commitments in times of crisis. A key question to ask is to what extent this exposes your company to risk.
Measures to consider?
7. Virtual workplace
What is the risk?
Organizations are not given a lot of time to adapt to the digital workplace. Besides the technological aspect of working remotely it also brings challenges for people management, supervision of work and coaching of employees.
Measures to consider?
8. Reputation
What is the risk?
Due to cancelled contracts, cancelled projects, bad communication and other effects of the crisis, there can be a loss of confidence. It is important to have an adapted strategy and a clear plan to protect brand integrity.
Measures to consider?
9. Business continuity, crisis management & emergency plans
What is the risk?
Black swan events like COVID-19 will become more important during risk assessments, since previously unlikely high impact events will become likely. The demand for experienced and qualified emergency response staff will increase drastically.
Measures to consider?
10. Disruption and innovation
What is the risk?
When businesses are disrupted, other business models are created. Many organizations have now enforced their online activity, others have added services such as home delivery, or investigated alternative markets. Innovation is key.
Measures to consider?
11. Economic downturn
What is the risk?
The COVID-19 outbreak has had a strong negative effect on stock markets around the world. The many cancelled contracts and projects will have a financial impact for a lot of companies and industries with possible layoffs as a consequence. Update financial forecasts and expectations.
Measures to consider?
12. Working capital, cash management (incl. credit risk) & insurance
What is the risk?
The loss of revenue due to cancelled contracts and projects, as well as solvency issues on the client side can lead to liquidity problems. It is important to keep the core business going to keep cash coming in, but also to keep cash going out to your suppliers and other stakeholders.
Measures to consider?
13. Social & political instability
What is the risk?
COVID-19 impacted the political environment of many countries. There is possibly a new sense of authority where the government and regulatory bodies are playing a central role.
Measures to consider?
14. Transport, logistics & travel
What is the risk?
Every country or region has his own set of rules and regulations on travel and transportation, resulting in supply chain and business interruptions.
Measures to consider?
15. Strategy & financial plan
What is the risk?
The way we interact with our customers and employees has changed during the current COVID-19 situation, but this can very well be a permanent change. If the way we think and behave has changed, this could also have an impact on our strategic plans and financial forecasts.
Measures to consider?
16. Steering information & data
What is the risk?
These days it is essential to rely on qualitative and readily-available steering information. The crisis has changed the way we work and thereby the way we build and design our business processes.
Measures to consider?
17. Stakeholder management & communication
What is the risk?
No clear communication or communicating inaccurate information to your stakeholders can lead to a loss of trust and a loss of confidence. Do not only think short term, but also think about the period after COVID-19.
Measures to consider?
18. Tax & Trade
What is the risk?
Travel and business operations are impacted heavily due to the many new and changing local and global regulations. It is crucial to keep up-to-date with the changing tax regimes and government support programs that impact you.
Measures to consider?
19. Third party management & supply chain
What is the risk?
Border closures, travel bans and other consequences from the continuously changing COVID-19 measures have a big impact on our supply chain. A loss of availability to critical goods and resources can lead to major losses.
Measures to consider?
Olivier Elst T: +32 (0)485 17 83 48 |
An Vanderhulst T: +32 (0)473 55 43 12 |
Raphaël Schair T: +32 (0)98 21 07 04 |