The coronavirus disease (COVID-19) outbreak has quickly advanced on a global scale and responses to it continue to rapidly evolve. The financial impact of COVID-19 will likely put enormous pressure on corporations’ financial results and present potential challenges for individual employees. This pressure may increase the temptation for individuals to engage in improper acts in order to address their immediate financial needs or resort to financial statement manipulation to meet stakeholder expectations.

For some, as these financial pressures mount, the line separating acceptable from unacceptable behavior can become blurred. At the same time, controls such as segregation of duties may be weakened due to work force displacement or distraction. Organizations need to be sensitive to the pressures that could result in financial statement manipulations at the corporate or operating subsidiary level. Further, management should recognize that the environment created by adverse events such as COVID-19 could lead to increased fraud by employees (e.g., asset misappropriation or bonus maximization schemes).