COVID-19 and the Going Concern Opinion

In the FARview Podcast Series, FAR staff members conduct interviews with academics and
professionals regarding the practical relevance of academic research in the field of auditing.
This written report contains an edited transcript of the interview with Marshall Geiger. Geiger
is the CSX Chair in Management and Accounting and Professor of Accounting at the
University of Richmond, US.

Key points

• A Going Concern Opinion is not supposed to predict failure, it’s a mechanism for the
  auditor to alert readers that there are concerns.
• Going concern research in a COVID-19 era might flesh out more cleanly that more
  industry experience will lead to more accurate going concern opinions.
• Companies are adapting their business models, but the real issue is how well they are
  going to do under the new business model, how excellent are they going to be able to
  execute their business plans.
• The possibility of a second COVID_19 wave is an important issue. What will that wave
  look like? How much will it affect specific companies? And how much support will
  companies get then? That should also be disclosed by management.