FAR Newsletter: Going Concern Opinions - Literature review, practice note & upcoming masterclass

15 October 2019

In this newsletter:  

• FAR literature review and practice note ‘A synthesis of auditor reporting on going-concern uncertainty’ by Marshall Geiger, Anna Gold and Philip Wallage
• FAR masterclass ‘Going Concern Opinions (GCOs) in theory & practice’ – 9 December 2019
• Video interview with FAR researcher Katlijn Haesebrouck; ‘Researching the human factor in accounting’
• What's driving audit fees in 2019? Podcast with FAR Board member Robert Knechel by FERF
• FAR board member and managing director Olof Bik accepts chair in behavioral research in auditing at Nyenrode Business University

FAR literature review and practice note ‘A synthesis of auditor reporting on going-concern uncertainty’.

By Marshall Geiger (University of Richmond), Anna Gold (Vrije Universiteit Amsterdam) and Philip Wallage (Vrije Universiteit Amsterdam and University of Amsterdam).

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

FAR Masterclass ‘Going Concern Opinions (GCOs) in theory & practice’ – 9 December 2019

Following on from the literature review and practice note, the FAR will organize a masterclass about Going Concern Opinions (GCOs) on 9 December 2019.

In this masterclass, the most important findings of this extensive literature review will be presented with a focus on relevant issues for practitioners. Next, in break-out sessions, participants will discuss their experiences and the practical implications of the research findings, as well as practical issues that future research should address. Topics that will be discussed include the interaction between audit teams and the firms’ GCO panel, the effectiveness of predictive models, and whether GCOs can be seen as a self-fulfilling prophecy. Finally, the discussions will be summarized and shared in a plenary session. 

Due to the great importance of GCO’s for financial statement users, this masterclass is relevant for auditors of large and small firms and of all job levels.

For more information and registration, click here.

Video interview with FAR researcher Katlijn Heasebrouck; ‘Researching the human factor in accounting’

Katlijn Haesebrouck is an assistant professor at the Department of Accounting and Information Management at Maastricht University. In this recent video interview with FAR she speaks about the FAR-project ‘The Effect of Audit Culture on Audit Quality’, she’s currently working on with Jasmijn Bol (Tulane University), Isabella Grabner (Vienna University) and Mark Peecher (University of Illinois at Urbana-Champaign).

What's driving audit fees in 2019? Podcast with FAR board member Robert Knechel by FERF

The Financial Executives Research Foundation (FERF) recently spoke with FAR Academic Board Member Robert Knechel about 'what financial executives should consider when preparing for an audit, the main drivers in audit fee increases, and the impact of emerging technologies on audits.' (FEI Daily, 5 September 2019).

The interview and the podcast are now available on their website and can be found here. 

FAR board member and managing director Olof Bik accepts chair in behavioral research in auditing at Nyenrode Business University

On Tuesday September 17th, 2019 prof. dr. Olof Bik delivered his inaugural speech titled: ‘Crossing the divide: behavioral research in auditing’. With this speech Bik marked his acceptance of the chair in Behavioral research in auditing at Nyenrode Business University. 

Click here to read the full report 

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