The corona pandemic has affected the entire world since the beginning of last year. Most of the world was shut down during the first months of last year, which has resulted in a negative influence on the world economy. As a result of the shutdowns and lack of tourism many companies have lost their turnovers. The auditors in Denmark are normally under a lot of pressure, because the majority of the annual reports have a deadline by May 31st. The pandemic has resulted in even more pressure on the auditors and extra focus on the going concern assumption.
The going concern assumption is one of the most important basic assumptions when a company is preparing the annual report, and in the auditor’s evaluation regarding the company’s continued operation. In an economical crisis such as the COVID-19 pandemic, the going concern assumption is extra important, because the circumstances that were predictable before, is now unpredictable. The COVID-19 pandemic is a subsequent event for many companies in our thesis, which is why it is extremely important that the company’s management and the auditor is aware of the pandemic and it’s consequences.
This thesis is based on an empirical analysis where we want to examine how the auditors are involved in the evaluation of the going concern assumption, and how the COVID-19 crisis has affected the annual reports. The study is based on the auditor’s role and responsibility in relation to the going concern assumption with focus on economical uncertainty during the COVID-19 crisis. Further, our study will examine if there is a connection between when the annual report has been reported to Erhvervsstyrelsen, the mentioning of COVID-19 in the annual reports and the recommendations from the firms of accountants regarding COVID-19.
The analysis shows that the sooner the annual report is being reported, the more it contains mentioning of COVID-19. The mentioning indicates that the management of the companies have included their auditor in the evaluation of the going concern, and whether COVID-19 should be mentioned or not based on the pandemics impact and has followed the recommendations from the firms of accountants. Further, the analysis indicates that especially restaurants are affected by the shutdown based on the mentioning of uncertainty in the annual report. The abovementioned indicates that the COVID-19 crisis has led its mark in the annual report and the evaluation of going concern. Further, both the management and the auditor are highly involved in the evaluation and the consequences that COVID-19 has resulted in.
|Uddannelser||Cand.merc.aud Regnskab og Revision, (Kandidatuddannelse) Afsluttende afhandling|