News 20/10/25

Audit procedures regarding going concern deserve continued attention from the sector

External auditors generally pay serious attention to addressing going concern in statutory audits, as shown by an exploratory study conducted by the AFM. Our data analysis indicates an upward trend in the number of material uncertainty sections included in auditor’s opinions at audit clients that later went bankrupt. The AFM would like for this upward trend to continue. It remains important that external auditors continue to pay adequate attention to the subject of going concern and continue to strive to improve professional scepticism. For this reason, we put forward a number of expectations.

In short

Users of financial statements must have a clear understanding of the going concern of the company
External auditors generally pay serious attention to the challenges
More material uncertainty sections at audit clients that later went bankrupt
The theme of going concern remains important and relevant for both the sector and the AFM

Users of financial statements must have a clear understanding of the going concern of the company

Bankruptcies can have a significant impact on all stakeholders. It is important that external auditors obtain sufficient and appropriate audit evidence during the statutory audit of financial statements to assess whether the going concern assumption applied by the executive board is appropriate. This enables users of financial statements to gain a clear understanding of the going concern of the company, and to be timely warned of any material uncertainties regarding going concern that may indicate a potential impending bankruptcy.

External auditors generally pay serious attention to the challenges

Going concern is an important subject; raising awareness of it is one of the AFM’s priorities. In 2025, we conducted an exploratory study into how external auditors take responsibility when auditing going concern. The interviews conducted indicate that external auditors generally pay serious attention to the challenges involved in evaluating the appropriateness of the going concern assumption. These challenges – which are widely acknowledged across the sector – are complex. Examples include the forward-looking nature of audit evidence, which makes it more difficult to assess, and the rapid and sometimes unforeseeable developments in the external environment.

More material uncertainty sections at audit clients that later went bankrupt

Analysis of data received from audit firms indicates an increase in the number of cases where a material uncertainty section was included in auditor’s opinions at audit clients that later went bankrupt. The AFM would like for this upward trend to continue. That said, there are cases in which external auditors did not adequately fulfil their responsibility regarding going concern in statutory audits. Interviewees identified several key causes for this, such as insufficient independence from the audit client, and a lack of a broad and coherent (holistic) understanding of the audit client and its environment, resulting in clear red flags being missed.

The theme of going concern remains important and relevant for both the sector and the AFM

We are moderately optimistic about the outcomes of this exploratory study; however, they do not give reason to conduct a more in-depth thematic review at this time. We believe it is important that the sector continues to work on strengthening professional scepticism. Therefore, in our report, we set out a number of expectations for how the sector should approach going concern. This contributes to external auditors continuing to fulfil their responsibility and to users of financial statements being warned more often and in a timely manner about impending bankruptcies. The AFM will continue to pay attention to the theme of going concern, for example through data analysis and by following up on signals and incidents we receive.