Comments on: “Going Concern” Opinions – How Many? How Many More?

By: re: The Auditors » Blog Archive » Going Concern Audit Opinions: Why So Few Warning Flares?

Fri, 18 Sep 2009 17:28:29 +0000

[...] that may indicate there is substantial doubt about the company’s ability to continue as a going concern for a reasonable period of time include, for example [...]

By: re: The Auditors » Blog Archive » The “Last Out” May Come From Left Field…

Mon, 13 Jul 2009 20:02:40 +0000

[...] A “going concern” suit? In January during our inaugural webcast I said: One Bold Prediction for 2009: Credit/financial crisis suits will finally use the absence of “going concern” opinions prior to big failures to push at least one Big 4 firm to brink of failure. [...]

By: re: The Auditors » Blog Archive » Auditors Not Trying To Wiggle Off The Hook. Really.

Mon, 27 Apr 2009 02:41:54 +0000

[...] exactly trusts any more that the audit opinion gives a seal of approval on the viability, the “going concern” quality, of any public company? What exactly are we paying millions and millions [...]

By: fm

fm — Thu, 02 Apr 2009 20:35:23 +0000

@John @ Illinois

Thanks so much for noticing my WSJ quote. It’s pretty neat.
Francine

By: John @ Illinois

John @ Illinois — Thu, 02 Apr 2009 06:07:12 +0000

Francine, it was really cool to see you get quoted by the WSJ, keep up the good work. http://online.wsj.com/article/SB123860415462378767.html#mod=rss_whats_news_us

By: fm

fm — Wed, 01 Apr 2009 03:14:56 +0000

@Oversight For The Better

I suspect that your “It’s all about me” sentiments are shared by many in the profession. Unfortunately, the Type II error is even worse as PwC may find out with Conseco – Deliberately not making the call and having the company fail anyway. http://twitter.com/retheauditors/statuses/1426301866

By: Oversight for the Better

Oversight for the Better — Wed, 01 Apr 2009 03:01:44 +0000

Going concern is an assessment I would have a problem reporting. It’s like being a doctor and informing a patient they have a terminal illness. Even if all the evidence points that way, I would always be haunted wondering if I truly ran the last stake through their heart. And, if they survived despite my predictions, I would appear quite foolish, although relieved.

By: sanjoseey

sanjoseey — Wed, 01 Apr 2009 01:24:46 +0000

6% layoff in EY San Jose today after a 7 am conference call that lasted 45 mins most people didn’t even hear the news b/c they were put on hold to get into the conference call. Sad.

By: Tenacious Truman

Tenacious Truman — Tue, 31 Mar 2009 18:00:44 +0000

Anonymous Auditor @ 6

Not FM (obviously) but I think the point was the timing. Are the auditors analyzing the financial condition of their clients and, when appropriate, providing useful and timely warning of potential financial issues to the shareholders and investor community? Or, as I suspect Fran would assert, are they waiting until the conditions are so obvious they can no longer be credibly denied before issuing the going-concern warning?

When one has information regarding which firm is issuing a going-concern opinion to which client, and when that opinion is being issued, then one can match that information to other objective information and metrics, such as balance sheet and financial ratios, debt rating, and market conditions. That would give one a decent yardstick toward determining just how proactive, or how reluctant, the audit firms have been with respect to issuing the going-concern opinions.

– Tenacious T.

By: Anonymous Auditor

Anonymous Auditor — Tue, 31 Mar 2009 15:41:27 +0000

@fm 6:49 pm

On the one hand, I generally believe that any additional data is good data. On the other hand, what exactly would we learn from the number of going concern opinions by firm?

Does it tell us that the firm issuing more going concerns is more rigorous, or that it has crummier clients?

In the end, who would use the information? The only group I can think of is plaintiff’s attorneys who are scouting for someone to sue. If you are an investor with a legitimate interest in the company’s status, wouldn’t you be reading the K’s and Q’s?