Number of business failure warnings higher than during COVID

Chartered Accountants ANZ

8 April 2026

Auditors are raising more ‘going concern’ warnings for Australian 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.

In 2025, auditors flagged a material uncertainty related to going concern for 28 per cent of Australian listed companies outside the mining sector - up from 20 per cent in 2021. Among mining companies, the figure rose to almost half, compared with 32 per cent in 2021.

This level of uncertainty exceeds that seen at the height of the COVID disruptions 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 Report and Assurance Leader Amir Ghandar FCA said the findings underscore how difficult operating conditions have become for many companies, particularly those 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.”

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

“These are sectors where 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 data shows a clear size effect, with smaller and growth stage companies far more likely to face going concern uncertainty. Tighter funding conditions and reduced access to capital have left these entities exposed as borrowing costs remain elevated.”

“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 much more visible in audit reports,” concluded Mr Ghandar.

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