Audit Insights: The Top 5 risk areas every CFO should be watching

As we head towards the end of 2025, CFOs are once again reflecting on a year marked by change, resilience, and redefinition. Economic pressures have eased but not disappeared. Regulation continues to evolve. And the demand for transparent, reliable reporting has never been stronger.

At Verallo, we’ve spent this year helping finance leaders navigate an environment that’s anything but static. Across industries, five key risk areas have consistently shaped how organisations report, govern, and prepare for assurance – and they will remain firmly on the CFO agenda in 2026.

In this article, we delve into each of these five risk areas and how these affect financial reporting and audit readiness.

1. Inflation and the reliability of key assumptions

While inflation has settled from the highs of recent years, its effects still ripple through financial statements. Cost pressures, shifting interest rates, and fluctuating consumer confidence continue to test the assumptions underpinning forecasts and valuations.

For CFOs, the challenge lies in maintaining credibility and consistency. Assumptions that once felt robust may now need revisiting, whether in impairment testing, discount rate selection, or going concern assessments.

Transparent reasoning and clear documentation around these judgments not only strengthen reported results but also build confidence with auditors and stakeholders. In a volatile economic backdrop, well-founded assumptions are the cornerstone of credible reporting and working closely with an audit expert can help ensure those assumptions stand up to scrutiny throughout the assurance process.

2. Supply chain resilience and inventory risk

The story of supply chain disruption has evolved. What began as crisis management has become long-term adaptation, with organisations redesigning sourcing models, diversifying suppliers, and investing in resilience. These shifts, however, introduce new risks. Changes in supplier relationships, logistics costs, and lead times all feed directly into inventory valuation and margin reporting. When operational data doesn’t align with financial records, inconsistencies quickly surface during audit.

The most effective finance functions are those that maintain a direct line of sight from supply chain operations to the balance sheet, ensuring that every figure can be traced, tested, and trusted.

3. AI and data integrity

Artificial intelligence has firmly established itself within finance teams this year, driving efficiency in forecasting, reconciliations, and analytics. Yet the growing reliance on AI brings its own challenge: trust.

The integrity of financial reporting depends on the integrity of the data behind it. CFOs must ensure that AI-generated insights are governed, validated, and explainable. Clear documentation of system controls, data sources, and review processes is essential – not just for compliance, but for confidence.

As auditors increasingly assess the reliability of data-driven processes, organisations that invest in robust data governance are already seeing the benefits in smoother, more efficient audits.

4. ESG reporting and assurance

In 2025, sustainability reporting has truly come of age. With new UK and EU disclosure requirements now in place, ESG data is no longer a parallel exercise, it’s part of the same ecosystem as financial reporting.

The link between non-financial and financial information is becoming more explicit, from climate-related risks affecting asset values to governance structures influencing control frameworks. As a result, consistency and traceability have taken centre stage.

CFOs who integrate ESG metrics into core reporting processes are finding themselves better prepared for assurance, with fewer data gaps and greater alignment between what’s disclosed and what’s demonstrable.

5. Regulatory and accounting developments

The regulatory landscape has remained dynamic, with ongoing updates to the UK Corporate Governance Code and audit reform initiatives moving forward.

These changes are not just procedural; they signal a shift towards greater accountability and transparency across corporate reporting. For CFOs, this means staying proactive – understanding how new governance requirements or disclosure expectations intersect with existing control frameworks.

Early dialogue with auditors and boards helps anticipate the operational impact of regulatory change, avoiding last-minute adjustments and ensuring a more efficient audit process. Partnering with audit experts gives CFOs the forward visibility needed to align governance, risk, and reporting frameworks with evolving regulatory standards.

Embedding audit readiness for 2026

The organisations that handle audit most effectively share one characteristic: they treat readiness as a continuous discipline, not a year-end event. Strong data governance, consistent documentation, and open communication with auditors don’t just make audits smoother, they elevate the quality and credibility of financial reporting year-round.

At Verallo, our Audit team partners with CFOs to strengthen control environments, enhance reporting frameworks, and anticipate the next wave of regulatory and assurance developments. As we move into 2026, these fundamentals will remain central to building trust – within the organisation, the market, and the audit itself.

Get in touch

To explore how Verallo can help your organisation strengthen its financial reporting, control environment, and governance priorities, get in touch with our Audit specialists.