Coronavirus: Accounting firms urged to diversify

BUSINESS HEALTH   VIRUS

Even though the COVID-19 pandemic has disrupted businesses, it has also opened up new opportunities for accounting firms, an expert panel from the Association of Chartered Certified Accountants (ACCA) observed on Wednesday.

An ACCA survey indicates that the biggest problems impacting Uganda's private sector due to the COVID-19 pandemic and lockdown include an inability to defer or renegotiate debt financing obligations, cash flow problems, lower employee productivity, increased stockholding leading to a risk of obsolescence, reputational damage and breach of contract issues.

Dr Neema Kiure Mssusa, a member of Tanzania's National Board of Accountants and Auditors (NBAA) urged the industry to first focus on the health of staff.

"COVID-19 has caused disruption at a spectacular pace, but there are some opportunities. It is time to diversify into cash flow projections, restructuring activities, new business plans and liquidation as well as receivership services and to review technology budgets," Mssusa said.

This was during a virtual conference held under the theme, COVID-19: the road to recovery.

She noted that accounting firms must regularly check on their clients and hold regular conversations to assure clients of the accounting firms' support in coping with the COVID-19 disruptions.

Lawrence Ssemakula, the accountant general, pointed out that Uganda's economy is estimated to have grown by a slower 3.1% in the financial year 2019/20, down from the projected 6.3%. He added that the pandemic had disrupted supply chains as well as imports and exports.

Ssemakula said tourism, industry, agriculture and foreign direct investment receipts had significantly dropped and that remittances had reduced by 11% from the 2018/19 levels.

He said the multi-layered COVID-19 crisis had affected household incomes and demand.

"We do not know how long the pandemic will last, but we continue to see signs of recovery. COVID-19 is a new normal. It is time to shift from a point of emergency to focus on social and economic recovery," Semakula said.

Brian DeSouza, the KPMG East Africa partner and leader of corporates industry, said the industry should re-skill staff to take advantage of new opportunities.

He said the new opportunities entail handling demand for outsourcing of finance and human resources as well as tax and regulatory compliance.

The ACCA survey also indicated that opportunities exist to assist firms in digital transformation and supply chain management and to assist clients in improving business continuity and resilience.

Sanjay Rughani, the Standard Chartered Bank Tanzania boss, said it is essential to keep staff positive and optimistic, adding that fear reduces immunity by 40%.

"With a second wave and a recession projected, there is need to come up with viable business models," he said.