Finance Industry Going Concerns Trend

In our most recent published report, Going Concerns: A 22-Year Review, Audit Analytics provides a comprehensive overview of trends in the SEC Audit Opinion market. Utilizing our data, research can be narrowed down to investigate specific industry trends using company provided SIC codes.

In this blog, we focus on the notable upsurge of going concerns in the Finance industry. A going concern audit opinion indicates substantial doubt about the company’s ability to remain solvent for the next 12 months.

Finance Industry Opinions

The chart below displays the percentage of companies receiving a going concern opinion each year. Since FY2008, at the height of the financial crisis, the percentage of companies receiving a going concern had been steadily decreasing. This trend reversed during the global pandemic of FY2020. In FY2021, the number of companies with going concerns increased 191.8% compared to FY2020.

Going Concerns Population

Among companies in the Finance industry, with a classification of a Finance SIC code, the total number of audit opinions increased by 23.6% in FY 2021. In FY 2021, 21.3% of that total Finance population received a going concern compared to only 9.8% the previous year.

Although the pandemic caused widespread uncertainty in the market, affecting many businesses, is this the cause for the uptick of going concerns noted in the Finance industry?

SPACs Going Concerns

Although the total number of audit opinions grew sharply, the rate of going concerns grew more. This is partly due to the boom in Special Purpose Acquisition Companies (SPACs), also known as blank check companies.

Blank Check Vs. Other Going Concerns: Fiscal Year 2021

The amount of SPACs receiving a going concern profoundly surpassed the total amount of other financial companies combined.

SPACs contributed 86% towards going concerns for FY2021 compared to other companies falling under the Finance industry classification. Companies in the Real Estate and Finance Services sector of this industry only contributed 2% each towards going concern opinions. The remaining companies in the industry each contributed 1% or less.

Going Concern Trend Cause

In our report Going Concerns: A 22 Year Review, we analyze the underlying factors contributing to the year-over-year changes in the number of going concern trends.

In FY2021, the number of new companies that received a going concern in their first annual report increased by 148% across all industries.

New Company Going Concerns: Fiscal Year 2021

The chart above displays the percentage number of new companies receiving a going concern, classified by industry.

Combined, the Finance industry contributed 71% to the new companies receiving a going concern in FY2021. SPACs contributed 69% of those alone. This underlies the sharp increase in new company going concerns in FY2021, primarily driven by going concern opinions for SPACs.


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