The Ukrainian-Russian Conflict’s Effect on European Key Audit Matters

It has been a year since the invasion of Ukraine by Russian forces, a momentous event that has made a global impact. In an effort to gain some insight into how the conflict has affected public companies, we analyze European Key Audit Matters (KAMs) to identify any trends that may shed some light on the matter.

The Europe Key Audit Matters Database  powered by Audit Analytics contains records back to 2013 and covers all KAMs disclosed in English from 4,000+ entities. Auditing professionals identify KAMs as matters of most significance when reviewing a company’s financial statements. There are countless ways to look at this data including analyzing KAMs by topic, industry, country, or stock exchange.

The first opinion to mention the Ukrainian-Russian conflict within a key audit matter was for fiscal year 12/30/2021 by Everyman Media Group PLC. The UK independent cinema company issued its audit opinion on March 25, 2022. Since then, 157 individual KAMs have been flagged in audit opinions noting the ongoing conflict. Independent auditors identified these KAMs from 135 different companies. Given that not all EU companies have yet filed their financial statements for FY 12/31/22, this analysis is based on the current data provided at the time of this publication.

The graph below displays the top 10 EU KAM topics that referenced the Ukrainian-Russian conflict. Combined, these topics constituted 84% of the total number of KAMs. The leading KAM topic referencing the war was Going Concerns representing 34% of total KAMs. Other Investments ranked second, representing 16%, and Goodwill ranked third, representing 8%. Lastly, the remaining KAMs identified represented 6% or below of total KAMs.

Top 10 KAM topics referencing Ukraine

Going Concern KAM Topic

Since the start of the conflict, 59 Going Concern KAMs were identified by the independent auditors of 57 unique companies. Going Concern KAMs evaluate material uncertainty of the business environment. Typically coupled with COVID-19 impacts, many KAMs indicated that the company had performed risk assessments that included, but was not limited to, the Ukrainian-Russian conflict. These assessments raised risk concerns regarding post balance sheet events that could impact going concern assumptions.

In addition, many going concern KAMs disclosed that the military invasion of Ukraine was a factor in the company’s ability to continue as a going concern. The war has affected operations in numerous countries and sanctions imposed on Russia have created market volatility. The impossibility of predicting the magnitude of the outcome undoubtedly raises material uncertainty for these companies.

Other Investments KAM Topic

Since the beginning of the invasion, 28 Other Investment KAMs were identified by the independent auditors of 27 companies. Other Investment KAMs are significant matters that impacts a company’s equity. While all Other Investment KAMs evaluated the Ukrainian-Russian wars impact on the company, only 17% cited having a direct influence on investments. In response to the war, market uncertainty and trade restrictions heightened, affecting future economic conditions.

Going Concerns Modification

In many cases for the EU, auditors include going concerns as a key audit matter in their report. However, this does not conclude that the company has significant doubt in its ability to continue as a going concern. Of all the companies that had a KAM citing the conflict, 26 received a going concern modification in their audit report that expressed significant doubt in the company’s ability to continue as a going concern. In 62% of these companies, the Ukrainian-Russian conflict was listed as a factor contributing to material uncertainty. Moreover, 38% referenced the war as being the most significant factor affecting the company’s ability to continue as a going concern.

Going Concerns Referencing Ukraine


The news of the invasion alarmed varying markets abroad, affecting more than just the countries involved. Across 28 different countries,148 audit opinions in total cited the conflict. However, since the start of the conflict, only 4% of opinions from companies listed on European exchanges referenced the war.

Percentage of Opinions referencing Ukraine

Ukraine had three auditor opinions issued since the start of the conflict, of which two stated the war’s effect on the company’s operations causing material uncertainty. Russia had 12 opinions issued, of which 25% assessed the potential impacts of the war. Zaim Credit Systems PLC, located in Moscow, disclosed a material uncertainty with respect of the Russian invasion of Ukraine.

Furthermore, the consequential impacts of the conflict were assumed to disrupt business for neighboring countries. Poland, Romania, Latvia, and Estonia, all bordering countries of Russia and Ukraine had a combined total of seven auditor opinions issued that discussed the war, representing 4% of their 163 combined total opinions.


As expected, the Ukrainian-Russian conflict negatively impacted many industries. The chart below displays the distribution of KAMs referencing the conflict across all industries.

Industry breakdown of KAMs referencing Ukraine

Finance was the leading industry, representing 35% of total KAMs mentioning the war. Manufacturing represented 21% of total KAMs while Transportation & Communication and Mining represented 9%. The remaining industries constituted 8% or less of total KAMs referencing the conflict. Presently, of all finance KAMs issued, only 30% mentioned the war having a direct impact on the key audit matter.

  1. AA Europe database includes equity-listed public companies on regulated & select unregulated EEA, UK & Swiss Exchanges.
  2. AA EU Key Audit Matters products covers all KAMs disclosed in English.

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