FAR Literature review: ‘A Synthesis of Auditor Reporting on Going-Concern Uncertainty: An Update and Extension’

By Marshall Geiger, Anna Gold and Philip Wallage.

The auditor’s decision regarding a going concern opinion (GCO) is among their most important judgments, as GCOs impact the client company, markets, financial statement users, and auditors themselves. Such a sensitive and complex judgement call requires expertise and experience. In the academic literature, GCO decisions are often seen as related to audit quality, and they are among the few observable outcomes of the audit that vary across engagements. In the last decades, academic researchers have spent considerable effort examining GCO decisions. The researchers believe that audit practitioners can benefit from improved awareness of the insights that research has generated.

In the complete report (Geiger, Gold, and Wallage, 2019) the researchers review and synthesize 149 academic studies authored since 2013, the end of the previous synthesis by Carson et al (2013).

In the practitioner note the researchers make a selection of what they deem the most interesting insights from their review, and discuss their implications for practice.

On 9 December 2019, the FAR will organize a masterclass about Going Concern Opinions.