Is technology running ahead of accounting & audit procedures

‘Certain events are happening around the World which are raising serious questions of Business and Damages Valuations.

Canada had an outage of one of it’s telecom service providers called Rogers in early July ’22. Individuals and businesses were impacted in many ways by this service collapse across Canada (which happened during an upgrade of facilities). Canada also has an oligopoly of 3 large telecom service providers and one of them went down for several hours / days. The issues that are coming up are how does one value Damages payable to individuals & Businesses. On their own the company Rogers has stated that they will not bill for 5 days due to this outage. However, many feel that this is totally inadequate and individuals and businesses in Canada suffered a lot more than the very petty offer of not billing for 5 days. The main question that arises is how does one fix Damages / Penalty for absence of digital services which impacted businesses and individuals digital financial transactions. How is this loss to be valued and what are the parameters / norms to be considered. This becomes an important question for provisioning of outage costs in the books of the company. Also, there are demands by impacted users that all telecom service providers must be forced to keep themselves in readiness for picking up the slack. If one is done, the other two must pick up the service burden. Clearly, this will increase assets and facilities maintenance costs. How are these costs to be valued and who will give the final signal of expectations fulfillment?

Business Valuations and Business Revival – we read that AIG (large insurance group almost collapsed in 2008). The new management responsible for business revival is finding that basic data on underwriters etc is not readily available. Similarly, the valuation of Twitter is bogged down due to artificial user numbers. Accounting & auditing is falling behind of recognizing costs of insufficient and incomplete or erroneous data. How does one resolve these issues, considering that customers and investors need to be given comfort on the financial numbers which are declared.

With industry and technology providers, there needs to be a need to redefine data expectations for the purposes of accounting and auditing. Else, we will keep reading of audit failures or business valuations gone terribly wrong and beneath the polished exterior there were lots of issues still to be resolved and addressed.  This is becoming a very important part of taking disclosures matters forward.’

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