MEDIA RELEASE (NZ)

Auditors are raising more ‘going concern’ warnings for New Zealand companies, than at the height of the COVID pandemic, underscoring that today’s economic pressures pose an even bigger threat than 2021’s once-in-a-generation crisis.

The report shows that in 2025 auditors highlighted a material uncertainty related to going concern for 15 per cent of New Zealand listed companies, up from 13 per cent in 2021.

While this is lower than Australia’s 28 per cent, it represents a significant proportion of the New Zealand market and reflects the cumulative impact of global trade uncertainty, market volatility, higher interest rates and persistent inflationary pressures on business viability.

The report, Insights into 2025 auditor reports: A focus on going concern was released today by Chartered Accountants Australia and New Zealand (CA ANZ), in partnership with the Universities of Melbourne and Queensland.

CA ANZ Reporting and Assurance Leader Amir Ghandar FCA said the findings underscore how difficult operating conditions have become, particularly for companies reliant on ongoing access to capital.

“What’s striking is that going concern uncertainty hasn’t eased since COVID, it’s intensified,” Mr Ghandar said.

“Auditors are now flagging greater uncertainty than during the pandemic itself, which shows how sustained economic pressures around liquidity, refinancing and future profitability can be just as challenging for businesses as an acute shock.”

“New Zealand is in a comparatively stronger position to Australia, but it is not immune.”

“Certain sectors are under sustained pressure. Going concern flags are most frequent in consumer staples, health care and information technology, sectors where business models are often capital intensive, dependent on future growth, or exposed to volatile input costs.”

“In these sectors, access to funding, confidence in future earnings and the ability to absorb cost shocks really matter.”

“Audits don’t just provide a pass or fail. They give nuanced, transparent information that helps investors, lenders and the wider market understand both the strengths of a business and the risks it faces.”

“As economic conditions remain challenging for many businesses, high‑quality audits are more important than ever in helping capital flow to where it can be used productively and responsibly,”

“The report shows that financial statements are appropriately prepared, but auditors are drawing attention to conditions that could threaten a company’s ability to continue operating if they’re not addressed.”

“When conditions tighten, the risks become far more visible in audit reports,” concluded Mr Ghandar.