'Going concerns' concerning.

If the number of going concerns continues to rise at the level one research firm expects, there will be more than 3,500 audit opinions uncertain of their going concern assumptions in 2008. That represents a nearly 9 percent increase over the 3,293 going concerns reported last year, and would be highest number so far this decade. (See chart below.)

To determine its figures, Audit Analytics, an online intelligence service available from IVES Group Inc., reviewed the population of auditor opinions filed with the U.S. Securities Exchange Commission as of March 26, to determine the number of going concerns (opinions qualified by an uncertainty regarding the going concern assumption).

The data for calendar year 2008 is estimated because not all registrants had filed their auditor opinions with the SEC when Audit Analytics conducted the research.

But since United States large accelerated filers have 60 days to file, only substantially late filers (over 15 days) would be absent from the research population. A review of the large accelerated filers shows a calendar year 2008 spike in the number of going-concern opinions.

To better compare 2008 with 2007, Audit Analytics identified how many going concerns were filed for year-end 2007 on or before March 26, 2008. It determined that 49.6 percent of the total going concerns in 2007 were filed by that date.

During the corresponding time period, year-end 2008 received 1,780 going concerns. If the number received so far represents 49.6 percent of the total to be received in 2008, the ultimate number will reach 3,589.

In addition Audit Analytics estimates that for year-end 2008, 23.4 percent of auditor opinions will express an uncertainty regarding the auditor's going concern assumption, up from 20.9 percent in 2007 and continuing an upward trend that began in 2003, when 15 percent of auditors expressed uncertainty.

Compared with 2007, calendar year 2008 has experienced fewer opinions so far. The total opinions received for 2008 on or before March 26, 2009, equaled 10,895, versus 11,197 in 2007 during the same time period.

For the total year-end, 2007 received 15,773 unique auditor opinions. If the same percentage received in 2008 (as compared with 2007) continues--97.3 percent--year-end 2008 will receive 15,346 auditor opinions.

Marian Raab

Number of Audit Opinions Uncertain
of its Going Concern Assumption

2000    2805
2001    3065
2002    2901
2003    2617
2004    2600
2005    2747
2006    2924
2007    3293
2008 *  3589

Notes: Table made from bar graph.

[GRAPHIC OMITTED]