Accountability under pressure: Auditor going concern reporting and bankruptcy in the Netherlands

This study investigates the reporting behaviour of Dutch organizations under statutory audit requirements in the three years preceding bankruptcy. Using unique nationwide audit data (2012–2020), 572 bankruptcies of organizations subject to mandatory audits were identified. The results reveal widespread non-compliance with filing obligations, indicating weak accountability among firms nearing insolvency. In the year before bankruptcy, only a minority files audit opinions, and many fail to disclose material going concern uncertainties. Although bankruptcies of audited firms are rare (0.31% of audits), they inflict substantial societal harm, largely due to a few major failures. Delayed or missing filings thus serve as important early warning signals. Moreover, the results challenge the notion of a strong self-fulfilling prophecy effect of GCOs.

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Publication Details

Journal
Maandblad Voor Accountancy en Bedrijfseconomie
Published
2025-12-08
DOI
https://doi.org/10.5117/mab.99.162952
Primary Topic
Auditing, Earnings Management, Governance
Type
article
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article

Accountability under pressure: Auditor going concern reporting and bankruptcy in the Netherlands

Tjibbe Bosman
Maandblad Voor Accountancy en Bedrijfseconomie
Auditing, Earnings Management, Governance
article

Accountability under pressure: Auditor going concern reporting and bankruptcy in the Netherlands

Tjibbe Bosman
article en

Abstract

This study investigates the reporting behaviour of Dutch organizations under statutory audit requirements in the three years preceding bankruptcy. Using unique nationwide audit data (2012–2020), 572 bankruptcies of organizations subject to mandatory audits were identified. The results reveal widespread non-compliance with filing obligations, indicating weak accountability among firms nearing insolvency. In the year before bankruptcy, only a minority files audit opinions, and many fail to disclose material going concern uncertainties. Although bankruptcies of audited firms are rare (0.31% of audits), they inflict substantial societal harm, largely due to a few major failures. Delayed or missing filings thus serve as important early warning signals. Moreover, the results challenge the notion of a strong self-fulfilling prophecy effect of GCOs.

Maandblad Voor Accountancy en BedrijfseconomieVol. 99(6)
Vrije Universiteit Amsterdam (NL)
Openalex Percentile: Top 46%
Auditing, Earnings Management, Governance
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Accountability under pressure: Auditor going concern reporting and bankruptcy in the Netherlands — Tjibbe Bosman · Maandblad Voor Accountancy en Bedrijfseconomie (2025) | TGRS Research Map | TGRS