{"id":1330,"date":"2020-11-23T20:46:17","date_gmt":"2020-11-23T19:46:17","guid":{"rendered":"https:\/\/eaa-online.org\/arc\/blog\/blog\/covid-19-impacts-european-audit-opinions-3\/"},"modified":"2020-11-23T20:46:17","modified_gmt":"2020-11-23T19:46:17","slug":"covid-19-impacts-european-audit-opinions-3","status":"publish","type":"post","link":"https:\/\/eaa-online.org\/arc\/blog\/2020\/11\/23\/covid-19-impacts-european-audit-opinions-3\/","title":{"rendered":"COVID-19 Impacts on European Audit Opinions"},"content":{"rendered":"<p>This analysis was originally posted by <a href=\"https:\/\/www.auditanalytics.com\/?utm_source=EAA&amp;utm_medium=blog&amp;utm_campaign=2020.11.23\">Audit Analytics<\/a>.<\/p>\n<p class=\"has-text-align-center\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; text-align: center; color: rgb(55, 55, 55);\"><em style=\"border: 0px; font-family: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">This post will be updated to reflect the current number of European audit opinions citing the COVID-19 pandemic in a going concern opinion, key audit matter, or emphasis of matter.<\/em><\/p>\n<div aria-hidden=\"true\" class=\"wp-block-spacer\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(55, 55, 55); height: 20px;\">\n\t&nbsp;<\/div>\n<h2 id=\"h-overall-statistics\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 0.8125em; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(0, 0, 0);\">\n\tOverall Statistics<\/h2>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">As of the week ended 13 November 2020, Audit Analytics has observed the following trends in European audit opinions referencing COVID-19<span style=\"border: 0px; font-family: inherit; font-size: 10px; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; height: 0px; line-height: 1; position: relative; bottom: 1ex;\"><a href=\"https:\/\/blog.auditanalytics.com\/covid-19-impacts-on-european-audit-opinions\/#fn1\" id=\"ref1\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\">1<\/a><\/span>:<\/p>\n<ul style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em 2.5em; outline: 0px; padding-right: 0px; padding-left: 0px; vertical-align: baseline; list-style: square; color: rgb(55, 55, 55);\">\n<li style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">\n\t\tGoing Concern Modifications: 171<\/li>\n<li style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">\n\t\tEmphasis of Matter Paragraphs: 289<\/li>\n<li style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">\n\t\tKey Audit Matters: 574<\/li>\n<\/ul>\n<div class=\"wp-block-image\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">\n<figure class=\"aligncenter size-full is-resized\" style=\"display: table; clear: both; margin-left: auto; margin-right: auto;\">\n\t\t<img decoding=\"async\" class=\" size-full wp-image-1326\" alt=\"\" class=\"wp-image-34589\" height=\"324\" loading=\"lazy\" sizes=\"(max-width: 504px) 100vw, 504px\" src=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-15.png\" srcset=\"https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15.png 1662w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15-300x193.png 300w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15-1024x659.png 1024w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15-768x494.png 768w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15-1536x989.png 1536w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15-466x300.png 466w\" style=\"max-width: 100%; height: auto; border: none; padding: 6px;\" width=\"504\" \/><\/figure>\n<\/div>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">&nbsp;<\/p>\n<h2 id=\"h-going-concern-audit-opinion\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 0.8125em; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(0, 0, 0);\">\n\tGoing Concern Audit Opinion<\/h2>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">A going concern modification is the expressed uncertainty that a company is able to continue in the near future. Generally speaking, this uncertainty relates to whether the company will exist for another 12 months. The specifics of the long-term and extensive impacts of the coronavirus are currently unknown, but it is known that COVID-19 has the potential to materially impact operations across a wide variety of companies.<\/p>\n<div class=\"wp-block-image\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">\n<figure class=\"aligncenter size-full is-resized\" style=\"display: table; clear: both; margin-left: auto; margin-right: auto;\">\n\t\t<a href=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-17.png\" rel=\"noopener noreferrer\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\"><img decoding=\"async\" class=\" size-full wp-image-1327\" alt=\"COVID-19 European Audit Opinions with Going Concern Modification\" class=\"wp-image-34592\" height=\"206\" loading=\"lazy\" sizes=\"(max-width: 532px) 100vw, 532px\" src=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-17.png\" srcset=\"https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17.png 3045w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-300x116.png 300w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-1024x397.png 1024w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-768x298.png 768w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-1536x596.png 1536w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-2048x795.png 2048w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-500x194.png 500w\" style=\"border: none; max-width: 100%; height: auto; padding: 6px;\" width=\"532\" \/><\/a><figcaption style=\"display: table-caption; margin-top: 0.5em; margin-bottom: 1.625em; color: rgb(102, 102, 102); font-size: 12px; font-family: Georgia, serif; caption-side: bottom; max-width: calc(100% - 18px); padding: 3px 0px 5px 40px; position: relative;\"><em style=\"border: 0px; font-family: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">Click to expand<\/em><\/figcaption><\/figure>\n<\/div>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">As of the week ended 13 November 2020, non-Big Four auditors have signed the majority of going concern audit opinions for European filers referencing COVID-19. Considering many non-Big Four auditors audit smaller companies that are more likely to have uncertainty in their financials due to the pandemic, it makes sense that smaller audit firms have signed the majority of these opinions.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">The vast majority (78%) of companies receiving going concern audit opinions are small- cap companies, with a market capitalization under &euro;100 million. This observed trend remains unchanged, suggesting that smaller companies are continuing to be significantly impacted by the uncertainties surrounding the COVID-19 pandemic.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">Of the companies that have received a going concern audit opinion related to coronavirus, 25% are in the Manufacturing industry and 25% are in the Services industry. As of this update, Manufacturing has slightly outpaced the Services industry in terms of going concerns that Audit Analytics has captured. For Manufacturing companies in particular, the continued economic uncertainty during the pandemic has made subjective forecasts even more challenging and complex, raising concerns in particular about the ability to cover operating expenses in the event of full or partial operational closures.<\/p>\n<h2 id=\"h-key-audit-matters-kams\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 0.8125em; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(0, 0, 0);\">\n\tKey Audit Matters (KAMs)<\/h2>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">KAMs are intended to increase the usefulness and information provided in the auditor&rsquo;s opinion. The disclosures made by the auditor are supposed to describe an area of significant audit risk, a summary of the auditor&rsquo;s procedures to test the audit area, and any key observations of the auditor with respect to that risk (where appropriate). Considering the uncertainties regarding future impacts of the coronavirus pandemic, auditors may address the risk of that uncertainty in a KAM.<\/p>\n<div class=\"wp-block-image\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">\n<figure class=\"aligncenter size-full is-resized\" style=\"display: table; clear: both; margin-left: auto; margin-right: auto;\">\n\t\t<a href=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-20.png\" rel=\"noopener noreferrer\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\"><img decoding=\"async\" class=\" size-full wp-image-1328\" alt=\"COVID-19 European Audit Opinions with Key Audit Matter\" class=\"wp-image-34611\" height=\"226\" loading=\"lazy\" sizes=\"(max-width: 581px) 100vw, 581px\" src=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-20.png\" srcset=\"https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20.png 3027w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-300x117.png 300w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-1024x399.png 1024w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-768x299.png 768w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-1536x599.png 1536w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-2048x798.png 2048w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-500x195.png 500w\" style=\"border: none; max-width: 100%; height: auto; padding: 6px;\" width=\"581\" \/><\/a><figcaption style=\"display: table-caption; margin-top: 0.5em; margin-bottom: 1.625em; color: rgb(102, 102, 102); font-size: 12px; font-family: Georgia, serif; caption-side: bottom; max-width: calc(100% - 18px); padding: 3px 0px 5px 40px; position: relative;\"><em style=\"border: 0px; font-family: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">Click to expand<\/em><\/figcaption><\/figure>\n<\/div>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">As of the week ended 13 November 2020, Big Four auditors have identified 57% of the KAMs related to COVID-19 in audit opinions for European filers in this population.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">The majority (52%) of companies receiving KAMs related to the coronavirus have been small- cap companies with a market capitalization under &euro;100 million. However, the inherent risk of the ongoing economic uncertainty and its impact on financial resources and operations spans a broad spectrum that is not limited to smaller companies.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">Nearly 30% of companies that have received a KAM related to the pandemic to this point have been in the Finance, Insurance, and Real Estate industry, while 23% have been in the Services sector. The Finance sector receiving a substantial amount of COVID-19 KAMs referencing the pandemic can be partially attributed to potential impacts from an economic downturn during the pandemic that may trigger impairments related to carrying values of investments. Additionally, the valuation of financial instruments during the highly volatile market conditions of the pandemic is highly subjective and judgmental and can materially affect financial statements; this poses a significant audit risk, which may warrant its inclusion as a KAM.<\/p>\n<h2 id=\"h-emphasis-of-matter\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 0.8125em; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(0, 0, 0);\">\n\tEmphasis of Matter<\/h2>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">An emphasis of matter paragraph is a component of the auditor&rsquo;s report on financial statements that addresses matters that the auditor considers is fundamental to the overall understanding of financial statements. Given the widespread effects of coronavirus on companies and their financials, it is not surprising to see the COVID-19 pandemic mentioned as an emphasis of matter in financial statements.<\/p>\n<div class=\"wp-block-image\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">\n<figure class=\"aligncenter size-full is-resized\" style=\"display: table; clear: both; margin-left: auto; margin-right: auto;\">\n\t\t<a href=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-19.png\" rel=\"noopener noreferrer\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\"><img decoding=\"async\" class=\" size-full wp-image-1329\" alt=\"COVID-19 European Audit Opinions with Emphasis of Matter Paragraphs\" class=\"wp-image-34595\" height=\"207\" loading=\"lazy\" sizes=\"(max-width: 535px) 100vw, 535px\" src=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-19.png\" srcset=\"https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19.png 3037w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-300x117.png 300w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-1024x398.png 1024w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-768x298.png 768w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-1536x597.png 1536w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-2048x796.png 2048w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-500x194.png 500w\" style=\"border: none; max-width: 100%; height: auto; padding: 6px;\" width=\"535\" \/><\/a><figcaption style=\"display: table-caption; margin-top: 0.5em; margin-bottom: 1.625em; color: rgb(102, 102, 102); font-size: 12px; font-family: Georgia, serif; caption-side: bottom; max-width: calc(100% - 18px); padding: 3px 0px 5px 40px; position: relative;\"><em style=\"border: 0px; font-family: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">Click to expand<\/em><\/figcaption><\/figure>\n<\/div>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">As of the week ended 13 November 2020, non-Big Four auditors collectively signed 75% of opinions containing an emphasis of matter related to the pandemic, for the companies included in this analysis.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">The non-Big Four majority is reflected in that roughly 77% of the companies with an emphasis of matter paragraph referencing the pandemic are small- cap companies, with a market capitalization under &euro;100 million.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">Nearly 30% of companies with an audit opinion referencing the coronavirus are in the Manufacturing industry, while 26% are in the Finance, Insurance, and Real Estate sector, and 20% are in the Services industry. As the emphasis of matter paragraph relates to components in the notes that are fundamental to a users&rsquo; understanding of the financial statements and these same industries are the most likely to have a going concern modification, it makes sense that these industries also have an emphasis of matter paragraph.<\/p>\n<div aria-hidden=\"true\" class=\"wp-block-spacer\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(55, 55, 55); height: 42px;\">\n\t&nbsp;<\/div>\n<p class=\"has-text-align-center has-small-font-size\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 13px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; text-align: center; color: rgb(55, 55, 55);\">Audit Analytics Europe has 7 databases, including&nbsp;<a href=\"https:\/\/www.auditanalytics.com\/products\/europe\/audit-opinions?utm_source=website&amp;utm_medium=blog&amp;utm_campaign=2020.11.23\" rel=\"noreferrer noopener\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\">Audit Opinions<\/a>&nbsp;and&nbsp;<a href=\"https:\/\/www.auditanalytics.com\/products\/europe\/key-audit-matters?utm_source=website&amp;utm_medium=blog&amp;utm_campaign=2020.11.23\" rel=\"noreferrer noopener\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\">Key Audit Matters<\/a>, that cover public companies listed on European exchanges (EEA, UK, and Switzerland).<\/p>\n<hr class=\"wp-block-separator\" style=\"background-color: rgb(204, 204, 204); border: 0px; height: 1px; margin-bottom: 1.625em; margin-left: auto; margin-right: auto; max-width: 100px; color: rgb(55, 55, 55); font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px;\" \/>\n<p class=\"has-text-align-center\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; text-align: center; color: rgb(55, 55, 55);\"><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(0, 82, 149);\">For more information about Audit Analytics or this analysis, please<\/span><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(0, 113, 161);\">&nbsp;<\/span><a href=\"https:\/\/www.auditanalytics.com\/contact?utm_source=website&amp;utm_medium=blog&amp;utm_campaign=2020.11.23\" rel=\"noreferrer noopener\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\"><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(255, 145, 55);\">contact us<\/span><\/a><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(0, 113, 161);\">.<\/span><\/p>\n<div class=\"wp-block-group\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">\n<div class=\"wp-block-group__inner-container\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">\n<p class=\"has-text-align-center has-small-font-size\" style=\"border: 0px; font-family: inherit; font-size: 13px; font-style: inherit; font-weight: inherit; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; text-align: center;\"><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(255, 145, 55);\">Interested in our content? Be sure to&nbsp;<\/span><a href=\"https:\/\/www.auditanalytics.com\/contact?utm_source=website&amp;utm_medium=blog&amp;utm_campaign=2020.11.23#newsletter\" rel=\"noreferrer noopener\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\"><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(0, 82, 149);\">subscribe<\/span><\/a><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(255, 145, 55);\">&nbsp;to receive our email notifications.<\/span><\/p>\n<\/p><\/div>\n<\/div>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\"><span id=\"fn1\" style=\"border: 0px; font-family: inherit; font-size: 10px; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; height: 0px; line-height: 1; position: relative; bottom: 1ex;\">1.This analysis is based on audit opinions collected by Audit Analytics. Weekly totals reflect the total number of filings per week and may change over time as filings are added to the database. Firms without an identifiable auditor or available market cap are excluded from the cumulative count by auditor and market cap in the tables, but are included in the overall total. For dual signed audit opinions, both auditors are included in the auditor analyses in the table and are included in the cumulative count by auditor, but the opinion is counted only once in the overall total.&nbsp;<a href=\"https:\/\/blog.auditanalytics.com\/covid-19-impacts-on-european-audit-opinions\/#ref1\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\"><img decoding=\"async\" alt=\"\u21a9\" class=\"emoji\" draggable=\"false\" role=\"img\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/13.0.0\/svg\/21a9.svg\" style=\"border: none !important; margin: 0px 0.07em !important; max-width: 100%; display: inline !important; box-shadow: none !important; height: 1em !important; width: 1em !important; vertical-align: -0.1em !important; background: none !important; padding: 0px !important;\" \/><\/a><\/span><\/p>\n<p><body id=\"cke_pastebin\" style=\"position: absolute; top: 12px; width: 1px; height: 1px; overflow: hidden; left: -1000px;\"><\/p>\n<p class=\"has-text-align-center\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; text-align: center; color: rgb(55, 55, 55);\"><em style=\"border: 0px; font-family: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">This post will be updated to reflect the current number of European audit opinions citing the COVID-19 pandemic in a going concern opinion, key audit matter, or emphasis of matter.<\/em><\/p>\n<div aria-hidden=\"true\" class=\"wp-block-spacer\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(55, 55, 55); height: 20px;\">\n\t\t&nbsp;<\/div>\n<h2 id=\"h-overall-statistics\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 0.8125em; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(0, 0, 0);\">\n\t\tOverall Statistics<\/h2>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">As of the week ended 13 November 2020, Audit Analytics has observed the following trends in European audit opinions referencing COVID-19<span style=\"border: 0px; font-family: inherit; font-size: 10px; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; height: 0px; line-height: 1; position: relative; bottom: 1ex;\"><a href=\"https:\/\/blog.auditanalytics.com\/covid-19-impacts-on-european-audit-opinions\/#fn1\" id=\"ref1\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\">1<\/a><\/span>:<\/p>\n<ul style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em 2.5em; outline: 0px; padding-right: 0px; padding-left: 0px; vertical-align: baseline; list-style: square; color: rgb(55, 55, 55);\">\n<li style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">\n\t\t\tGoing Concern Modifications: 171<\/li>\n<li style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">\n\t\t\tEmphasis of Matter Paragraphs: 289<\/li>\n<li style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">\n\t\t\tKey Audit Matters: 574<\/li>\n<\/ul>\n<div class=\"wp-block-image\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">\n<figure class=\"aligncenter size-full is-resized\" style=\"display: table; clear: both; margin-left: auto; margin-right: auto;\">\n\t\t\t<img decoding=\"async\" class=\" size-full wp-image-1326\" alt=\"\" class=\"wp-image-34589\" height=\"324\" loading=\"lazy\" sizes=\"(max-width: 504px) 100vw, 504px\" src=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-15.png\" srcset=\"https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15.png 1662w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15-300x193.png 300w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15-1024x659.png 1024w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15-768x494.png 768w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15-1536x989.png 1536w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-15-466x300.png 466w\" style=\"max-width: 100%; height: auto; border: none; padding: 6px;\" width=\"504\" \/><\/figure>\n<\/p><\/div>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">&nbsp;<\/p>\n<h2 id=\"h-going-concern-audit-opinion\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 0.8125em; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(0, 0, 0);\">\n\t\tGoing Concern Audit Opinion<\/h2>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">A going concern modification is the expressed uncertainty that a company is able to continue in the near future. Generally speaking, this uncertainty relates to whether the company will exist for another 12 months. The specifics of the long-term and extensive impacts of the coronavirus are currently unknown, but it is known that COVID-19 has the potential to materially impact operations across a wide variety of companies.<\/p>\n<div class=\"wp-block-image\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">\n<figure class=\"aligncenter size-full is-resized\" style=\"display: table; clear: both; margin-left: auto; margin-right: auto;\">\n\t\t\t<a href=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-17.png\" rel=\"noopener noreferrer\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\"><img decoding=\"async\" class=\" size-full wp-image-1327\" alt=\"COVID-19 European Audit Opinions with Going Concern Modification\" class=\"wp-image-34592\" height=\"206\" loading=\"lazy\" sizes=\"(max-width: 532px) 100vw, 532px\" src=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-17.png\" srcset=\"https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17.png 3045w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-300x116.png 300w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-1024x397.png 1024w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-768x298.png 768w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-1536x596.png 1536w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-2048x795.png 2048w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-17-500x194.png 500w\" style=\"border: none; max-width: 100%; height: auto; padding: 6px;\" width=\"532\" \/><\/a><figcaption style=\"display: table-caption; margin-top: 0.5em; margin-bottom: 1.625em; color: rgb(102, 102, 102); font-size: 12px; font-family: Georgia, serif; caption-side: bottom; max-width: calc(100% - 18px); padding: 3px 0px 5px 40px; position: relative;\"><em style=\"border: 0px; font-family: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">Click to expand<\/em><\/figcaption><\/figure>\n<\/p><\/div>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">As of the week ended 13 November 2020, non-Big Four auditors have signed the majority of going concern audit opinions for European filers referencing COVID-19. Considering many non-Big Four auditors audit smaller companies that are more likely to have uncertainty in their financials due to the pandemic, it makes sense that smaller audit firms have signed the majority of these opinions.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">The vast majority (78%) of companies receiving going concern audit opinions are small- cap companies, with a market capitalization under &euro;100 million. This observed trend remains unchanged, suggesting that smaller companies are continuing to be significantly impacted by the uncertainties surrounding the COVID-19 pandemic.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">Of the companies that have received a going concern audit opinion related to coronavirus, 25% are in the Manufacturing industry and 25% are in the Services industry. As of this update, Manufacturing has slightly outpaced the Services industry in terms of going concerns that Audit Analytics has captured. For Manufacturing companies in particular, the continued economic uncertainty during the pandemic has made subjective forecasts even more challenging and complex, raising concerns in particular about the ability to cover operating expenses in the event of full or partial operational closures.<\/p>\n<h2 id=\"h-key-audit-matters-kams\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 0.8125em; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(0, 0, 0);\">\n\t\tKey Audit Matters (KAMs)<\/h2>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">KAMs are intended to increase the usefulness and information provided in the auditor&rsquo;s opinion. The disclosures made by the auditor are supposed to describe an area of significant audit risk, a summary of the auditor&rsquo;s procedures to test the audit area, and any key observations of the auditor with respect to that risk (where appropriate). Considering the uncertainties regarding future impacts of the coronavirus pandemic, auditors may address the risk of that uncertainty in a KAM.<\/p>\n<div class=\"wp-block-image\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">\n<figure class=\"aligncenter size-full is-resized\" style=\"display: table; clear: both; margin-left: auto; margin-right: auto;\">\n\t\t\t<a href=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-20.png\" rel=\"noopener noreferrer\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\"><img decoding=\"async\" class=\" size-full wp-image-1328\" alt=\"COVID-19 European Audit Opinions with Key Audit Matter\" class=\"wp-image-34611\" height=\"226\" loading=\"lazy\" sizes=\"(max-width: 581px) 100vw, 581px\" src=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-20.png\" srcset=\"https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20.png 3027w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-300x117.png 300w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-1024x399.png 1024w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-768x299.png 768w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-1536x599.png 1536w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-2048x798.png 2048w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-20-500x195.png 500w\" style=\"border: none; max-width: 100%; height: auto; padding: 6px;\" width=\"581\" \/><\/a><figcaption style=\"display: table-caption; margin-top: 0.5em; margin-bottom: 1.625em; color: rgb(102, 102, 102); font-size: 12px; font-family: Georgia, serif; caption-side: bottom; max-width: calc(100% - 18px); padding: 3px 0px 5px 40px; position: relative;\"><em style=\"border: 0px; font-family: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">Click to expand<\/em><\/figcaption><\/figure>\n<\/p><\/div>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">As of the week ended 13 November 2020, Big Four auditors have identified 57% of the KAMs related to COVID-19 in audit opinions for European filers in this population.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">The majority (52%) of companies receiving KAMs related to the coronavirus have been small- cap companies with a market capitalization under &euro;100 million. However, the inherent risk of the ongoing economic uncertainty and its impact on financial resources and operations spans a broad spectrum that is not limited to smaller companies.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">Nearly 30% of companies that have received a KAM related to the pandemic to this point have been in the Finance, Insurance, and Real Estate industry, while 23% have been in the Services sector. The Finance sector receiving a substantial amount of COVID-19 KAMs referencing the pandemic can be partially attributed to potential impacts from an economic downturn during the pandemic that may trigger impairments related to carrying values of investments. Additionally, the valuation of financial instruments during the highly volatile market conditions of the pandemic is highly subjective and judgmental and can materially affect financial statements; this poses a significant audit risk, which may warrant its inclusion as a KAM.<\/p>\n<h2 id=\"h-emphasis-of-matter\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 0.8125em; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(0, 0, 0);\">\n\t\tEmphasis of Matter<\/h2>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">An emphasis of matter paragraph is a component of the auditor&rsquo;s report on financial statements that addresses matters that the auditor considers is fundamental to the overall understanding of financial statements. Given the widespread effects of coronavirus on companies and their financials, it is not surprising to see the COVID-19 pandemic mentioned as an emphasis of matter in financial statements.<\/p>\n<div class=\"wp-block-image\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">\n<figure class=\"aligncenter size-full is-resized\" style=\"display: table; clear: both; margin-left: auto; margin-right: auto;\">\n\t\t\t<a href=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-19.png\" rel=\"noopener noreferrer\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\"><img decoding=\"async\" class=\" size-full wp-image-1329\" alt=\"COVID-19 European Audit Opinions with Emphasis of Matter Paragraphs\" class=\"wp-image-34595\" height=\"207\" loading=\"lazy\" sizes=\"(max-width: 535px) 100vw, 535px\" src=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/https__blog.auditanalytics.com_wp-content_uploads_2020_11_image-19.png\" srcset=\"https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19.png 3037w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-300x117.png 300w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-1024x398.png 1024w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-768x298.png 768w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-1536x597.png 1536w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-2048x796.png 2048w, https:\/\/blog.auditanalytics.com\/wp-content\/uploads\/2020\/11\/image-19-500x194.png 500w\" style=\"border: none; max-width: 100%; height: auto; padding: 6px;\" width=\"535\" \/><\/a><figcaption style=\"display: table-caption; margin-top: 0.5em; margin-bottom: 1.625em; color: rgb(102, 102, 102); font-size: 12px; font-family: Georgia, serif; caption-side: bottom; max-width: calc(100% - 18px); padding: 3px 0px 5px 40px; position: relative;\"><em style=\"border: 0px; font-family: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">Click to expand<\/em><\/figcaption><\/figure>\n<\/p><\/div>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">As of the week ended 13 November 2020, non-Big Four auditors collectively signed 75% of opinions containing an emphasis of matter related to the pandemic, for the companies included in this analysis.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">The non-Big Four majority is reflected in that roughly 77% of the companies with an emphasis of matter paragraph referencing the pandemic are small- cap companies, with a market capitalization under &euro;100 million.<\/p>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">Nearly 30% of companies with an audit opinion referencing the coronavirus are in the Manufacturing industry, while 26% are in the Finance, Insurance, and Real Estate sector, and 20% are in the Services industry. As the emphasis of matter paragraph relates to components in the notes that are fundamental to a users&rsquo; understanding of the financial statements and these same industries are the most likely to have a going concern modification, it makes sense that these industries also have an emphasis of matter paragraph.<\/p>\n<div aria-hidden=\"true\" class=\"wp-block-spacer\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(55, 55, 55); height: 42px;\">\n\t\t&nbsp;<\/div>\n<p class=\"has-text-align-center has-small-font-size\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 13px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; text-align: center; color: rgb(55, 55, 55);\">Audit Analytics Europe has 7 databases, including&nbsp;<a href=\"https:\/\/www.auditanalytics.com\/products\/europe\/audit-opinions?utm_source=website&amp;utm_medium=blog&amp;utm_campaign=2020.11.23\" rel=\"noreferrer noopener\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\">Audit Opinions<\/a>&nbsp;and&nbsp;<a href=\"https:\/\/www.auditanalytics.com\/products\/europe\/key-audit-matters?utm_source=website&amp;utm_medium=blog&amp;utm_campaign=2020.11.23\" rel=\"noreferrer noopener\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\">Key Audit Matters<\/a>, that cover public companies listed on European exchanges (EEA, UK, and Switzerland).<\/p>\n<hr class=\"wp-block-separator\" style=\"background-color: rgb(204, 204, 204); border: 0px; height: 1px; margin-bottom: 1.625em; margin-left: auto; margin-right: auto; max-width: 100px; color: rgb(55, 55, 55); font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px;\" \/>\n<p class=\"has-text-align-center\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; text-align: center; color: rgb(55, 55, 55);\"><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(0, 82, 149);\">For more information about Audit Analytics or this analysis, please<\/span><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(0, 113, 161);\">&nbsp;<\/span><a href=\"https:\/\/www.auditanalytics.com\/contact?utm_source=website&amp;utm_medium=blog&amp;utm_campaign=2020.11.23\" rel=\"noreferrer noopener\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\"><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(255, 145, 55);\">contact us<\/span><\/a><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(0, 113, 161);\">.<\/span><\/p>\n<div class=\"wp-block-group\" style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\">\n<div class=\"wp-block-group__inner-container\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;\">\n<p class=\"has-text-align-center has-small-font-size\" style=\"border: 0px; font-family: inherit; font-size: 13px; font-style: inherit; font-weight: inherit; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; text-align: center;\"><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(255, 145, 55);\">Interested in our content? Be sure to&nbsp;<\/span><a href=\"https:\/\/www.auditanalytics.com\/contact?utm_source=website&amp;utm_medium=blog&amp;utm_campaign=2020.11.23#newsletter\" rel=\"noreferrer noopener\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\" target=\"_blank\"><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(0, 82, 149);\">subscribe<\/span><\/a><span class=\"has-inline-color\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(255, 145, 55);\">&nbsp;to receive our email notifications.<\/span><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<p style=\"border: 0px; font-family: &quot;Helvetica Neue&quot;, Helvetica, Arial, sans-serif; font-size: 15px; margin: 0px 0px 1.625em; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(55, 55, 55);\"><span id=\"fn1\" style=\"border: 0px; font-family: inherit; font-size: 10px; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; height: 0px; line-height: 1; position: relative; bottom: 1ex;\">1.This analysis is based on audit opinions collected by Audit Analytics. Weekly totals reflect the total number of filings per week and may change over time as filings are added to the database. Firms without an identifiable auditor or available market cap are excluded from the cumulative count by auditor and market cap in the tables, but are included in the overall total. For dual signed audit opinions, both auditors are included in the auditor analyses in the table and are included in the cumulative count by auditor, but the opinion is counted only once in the overall total.&nbsp;<a href=\"https:\/\/blog.auditanalytics.com\/covid-19-impacts-on-european-audit-opinions\/#ref1\" style=\"border: 0px; font-family: inherit; font-style: inherit; font-weight: bold; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; color: rgb(67, 102, 113); text-decoration-line: none;\"><img decoding=\"async\" alt=\"\u21a9\" class=\"emoji\" draggable=\"false\" role=\"img\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/13.0.0\/svg\/21a9.svg\" style=\"border: none !important; margin: 0px 0.07em !important; max-width: 100%; display: inline !important; box-shadow: none !important; height: 1em !important; width: 1em !important; vertical-align: -0.1em !important; background: none !important; padding: 0px !important;\" \/><\/a><\/span><\/p>\n<p><\/body><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This analysis was originally posted by Audit Analytics. This post will be updated to reflect the current number of European audit opinions citing the COVID-19 pandemic in a going concern opinion, key audit matter, or emphasis of matter. &nbsp; Overall Statistics As of the week ended 13 November 2020, Audit Analytics has observed the following [&hellip;]<\/p>\n","protected":false},"author":93,"featured_media":1331,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0},"categories":[],"tags":[2],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.12 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>COVID-19 Impacts on European Audit Opinions - ARC<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"COVID-19 Impacts on European Audit Opinions - ARC\" \/>\n<meta property=\"og:description\" content=\"This analysis was originally posted by Audit Analytics. This post will be updated to reflect the current number of European audit opinions citing the COVID-19 pandemic in a going concern opinion, key audit matter, or emphasis of matter. &nbsp; Overall Statistics As of the week ended 13 November 2020, Audit Analytics has observed the following [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/eaa-online.org\/arc\/blog\/2020\/11\/23\/covid-19-impacts-european-audit-opinions-3\/\" \/>\n<meta property=\"og:site_name\" content=\"ARC\" \/>\n<meta property=\"article:published_time\" content=\"2020-11-23T19:46:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/eaa-online.org\/app\/uploads\/sites\/3\/2020\/11\/covid-19_impacts_on_european_audit_opinions_0.png\" \/>\n\t<meta property=\"og:image:width\" content=\"600\" \/>\n\t<meta property=\"og:image:height\" content=\"335\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Jessica McKeon\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jessica McKeon\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"10 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/eaa-online.org\/arc\/blog\/2020\/11\/23\/covid-19-impacts-european-audit-opinions-3\/\",\"url\":\"https:\/\/eaa-online.org\/arc\/blog\/2020\/11\/23\/covid-19-impacts-european-audit-opinions-3\/\",\"name\":\"COVID-19 Impacts on European Audit Opinions - ARC\",\"isPartOf\":{\"@id\":\"https:\/\/eaa-online.org\/arc\/#website\"},\"datePublished\":\"2020-11-23T19:46:17+00:00\",\"dateModified\":\"2020-11-23T19:46:17+00:00\",\"author\":{\"@id\":\"https:\/\/eaa-online.org\/arc\/#\/schema\/person\/f61376a765d3f4be1057fe22deda2b4f\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/eaa-online.org\/arc\/blog\/2020\/11\/23\/covid-19-impacts-european-audit-opinions-3\/\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/eaa-online.org\/arc\/#website\",\"url\":\"https:\/\/eaa-online.org\/arc\/\",\"name\":\"ARC\",\"description\":\"Advanced Resources Center\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/eaa-online.org\/arc\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/eaa-online.org\/arc\/#\/schema\/person\/f61376a765d3f4be1057fe22deda2b4f\",\"name\":\"Jessica McKeon\",\"url\":\"https:\/\/eaa-online.org\/arc\/blog\/members\/93\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"COVID-19 Impacts on European Audit Opinions - ARC","robots":{"index":"noindex","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"og_locale":"en_US","og_type":"article","og_title":"COVID-19 Impacts on European Audit Opinions - ARC","og_description":"This analysis was originally posted by Audit Analytics. 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