When a company collapses shortly after a clean audit opinion, the same question always comes up: where were the auditors? But audit failure rarely starts in the audit file.

In this episode of Financial Reporting Conversations, part of the Why Audits Go Wrong series, we walk through the 7-step audit failure timeline, showing how audit failure develops from weak governance, management pressure, and flawed financial reporting long before the audit begins. We unpack how audit risk builds inside the entity, how it flows into the audit process, and why critical risks are often missed.

If you think audit failure is just about audit procedures, this episode will challenge that assumption and show how audit failure really unfolds.

Financial Reporting Conversations is brought to you by Basford Consulting helping professionals go beyond compliance and get financial reporting right.

For technical insights, training, and resources that make the unknowns in financial reporting known, visit basfordconsulting.com

🔗 Connect with us:
LinkedIn: Wayne Basford & Judith Leung
YouTube: @BasfordConsulting
Website: basfordconsulting.com

Identifying the acquirer under IFRS 3 sounds simple until reverse acquisition scenarios prove otherwise. One of the most common errors in IFRS 3 is getting the acquirer wrong, and when that happens, the entire set of financial statements can be materially misstated.

In this episode, we unpack how reverse acquisition issues arise, why legal form often misleads, and how to correctly identify the acquirer under IFRS 3. We walk through real-world indicators of control, common “Blind Freddy” mistakes, and the consequences of applying reverse acquisition accounting incorrectly.

If you think the entity issuing shares is always the acquirer, this episode will challenge that assumption.

Financial Reporting Conversations is brought to you by Basford Consulting helping professionals go beyond compliance and get financial reporting right.

For technical insights, training, and resources that make the unknowns in financial reporting known, visit basfordconsulting.com

🔗 Connect with us:
LinkedIn: Wayne Basford & Judith Leung
YouTube: @BasfordConsulting
Website: basfordconsulting.com

When a company collapses after a clean audit opinion, the immediate question is always the same: where were the auditors? But audit failure rarely starts in the audit file.

In this episode, we unpack why audit failure is often the result of deeper issues from poor client acceptance decisions to weak systems of quality management and commercial pressures inside audit firms. We explore how audit failure develops as a cascade, driven by human judgment, cognitive bias, and a lack of professional skepticism from the very beginning.

What you’ll learn:

• Why audit failure rarely starts with audit procedures
• How poor client acceptance decisions create downstream risk
• What the “cascade of audit failure” looks like in practice
• How cognitive bias distorts audit judgment and evidence
• Why commercial pressure undermines professional skepticism
• Where audit quality really breaks down — and when it should have been identified

If you think audit failure is just a technical mistake, this episode will challenge that assumption and show where things really start to go wrong.

Financial Reporting Conversations is brought to you by Basford Consulting helping professionals go beyond compliance and get financial reporting right.

For technical insights, training, and resources that make the unknowns in financial reporting known, visit basfordconsulting.com

🔗 Connect with us:
LinkedIn: Wayne Basford & Judith Leung
YouTube: @BasfordConsulting
Website: basfordconsulting.com