When audit failures occur, the focus almost always turns to the audit file — missed procedures, weak evidence, or poor judgment. But what if audit failures are actually driven by something more fundamental?

In this episode, we examine whether audit failures are caused by resource constraints within the engagement team. From insufficient technical expertise and lack of industry knowledge to unrealistic time budgets and staffing pressures, we unpack how these resource constraints can undermine audit quality before the audit even begins.

We also explore how audit failures often reflect deeper issues in firm-level quality management, leadership decisions, and commercial pressures.

If you think audit failures are simply technical breakdowns, 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 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

The most dangerous phase in mining isn’t exploration, it’s development. This is where projects become capital intensive, assumptions get tested, and going concern risks start to emerge.

In this episode, we unpack the financial reporting challenges that arise as mining entities transition out of IFRS 6 into IAS 36, and why this shift often exposes deeper issues. We explore how going concern becomes a critical judgment area, especially when funding, timelines, and engineering realities don’t align.

From revenue uncertainty under IFRS 15 to embedded leases, inventory valuation, and complex funding structures, this episode highlights where things start to go wrong and when entities should have known.

🎧 In this episode, you’ll learn:

• Why the development phase is the highest-risk stage for financial reporting
• How going concern risks build before projects fail
• When to exit IFRS 6 and trigger IAS 36 impairment
• Why revenue and funding structures introduce volatility and judgment

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

Auditing fraud risk in China is not just a technical challenge it can mean auditing businesses that don’t exist.

In this episode, Wayne Basford and Judith Leung explore how audit fraud risk in China and emerging markets operates at a fundamentally different level. Drawing on real-world cases and lessons from the China Hustle, they explain why standard audit procedures can fail when transactions, customers, and even bank evidence are deliberately fabricated.

The discussion highlights why audit fraud risk in China requires a different mindset one grounded in deep scepticism, local insight, and practical verification.

🎧 In this episode, you’ll learn:

• Why audit fraud risk in China can involve businesses that don’t exist
• Why traditional audit evidence like confirmations can be unreliable
• How fake customers, invoices, and cash flows are constructed
• Why site visits and tax records are critical audit evidence
• What auditors should do differently before accepting high-risk engagements

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

Financial reporting standards have existed for decades. Yet revenue recognition errors continue to appear in financial statements, audit files, and regulatory findings under IFRS 15.

So why does revenue recognition still go wrong under IFRS 15?

In this episode, Wayne Basford and Judith Leung explore the practical judgement areas that cause recurring mistakes when applying IFRS 15 Revenue from Contracts with Customers. They discuss why the five-step model can appear straightforward in theory but becomes far more complex in real reporting environments.

The conversation examines several common problem areas under IFRS 15, including misidentifying performance obligations, allocating revenue incorrectly, recognising revenue based on invoices rather than the standard, and failing to apply the reversal constraint when estimating contract consideration.

Using real-world examples, including long-term projects and construction contracts, they explain how cost estimates, contract variations, bonuses, and penalties can distort revenue recognition and lead to overstated financial results.

If you prepare, audit, review, or oversee financial statements, this discussion will sharpen your understanding of the judgement risks within IFRS 15 revenue recognition and highlight where financial reporting most often goes wrong.

🎧 In this episode, you’ll learn:

• Why revenue recognition errors still occur under IFRS 15
• Why recognising revenue based on invoices can be misleading
• How the IFRS 15 reversal constraint affects bonuses, claims, and variations
• Why cost-to-complete estimates can distort revenue recognition
• What auditors, boards, and preparers should watch for when reviewing revenue under IFRS 15

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

Financial reporting standards have existed for decades. Yet the same mistakes continue to appear in financial statements, audit files, and regulatory findings.

So why does financial reporting still go wrong?

In this episode, Wayne Basford and Judith Leung explore the recurring issues they see across audits, financial statements, and regulatory reviews. They discuss why standards that appear straightforward in theory are frequently misunderstood or misapplied in practice.

The discussion previews several areas where errors continue to occur, including construction contracts under IFRS 15, financial instruments under IFRS 9, business combinations under IFRS 3, deferred tax under IAS 12, and the risks created when auditors misunderstand controls or complex IT systems.

This episode also introduces the Basford Consulting webinar series, which examines the practical judgment areas where financial reporting and audit work most often go wrong.

If you prepare, audit, review, or oversee financial statements, this conversation will sharpen your understanding of why financial reporting errors persist and what professionals can do to avoid them.

🎧 In this episode, you’ll learn:

• Why financial reporting errors persist even decades after IFRS adoption
• Why auditors cannot ignore the control environment
• How IFRS 15 construction contracts create complex judgments
• Where financial instrument classification errors still occur under IFRS 9
• Why complex IT systems create audit risk

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