FAR Case Studies

FAR initiated two case studies as part of a case study pilot dealing with ‘near misses’: audits that nearly went wrong and entailed complex audit judgment and decision making. How do the parties involved respond to these near misses, and what measures are taken to prevent audit quality failure in the future? With the cooperation of two of the affiliated audit firms, two complex ‘near miss’ audit cases are to be selected that will be studied in depth, the envisaged outcome being an academic case study that can be used in audit training.

The idea is that we learn from the case what mechanisms are in place to assure that (a series of) events that potentially cause severe effects are sufficiently dealt with. Case studies could relate to:

  • the objectives and rationale behind firms’ policy decisions in relation to audit quality enhancements;
  • the root causes of restatements in financial statements after the audit opinion has been issued; and
  • the root causes of (near) audit quality failures (e.g., legal and disciplinary cases – not being currently running legal cases).

The two first case studies FAR initiated in 2017 are related to audit judgments and decisions in relation to (1) a going concern opinion and (2) significant fraud risks.


2017 - Going Concern Opinions


To be continued.

2017 - Significant Fraud Risks


To be continued.


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