When we talk about “war” many people picture the losses in conflict zones—life, property, and national security.
However, in today’s interconnected global economy, fueled by trade, investment, transportation, and the international financial system, the impact of war is no longer confined to the battlefield. The conflicts in the Middle East in 2026 clearly illustrate how geopolitical uncertainty can rapidly affect businesses worldwide. This includes rising energy prices, financial market volatility, uncertainty in maritime transport routes, and supply chain disruptions, all directly impacting operating costs, profitability, and liquidity of the business.

These effects extend beyond business performance and also inevitably reflect in various financial statements, such as asset impairment, inventory value, ability to collect payments from customers, investment value, and even the assessment of a going concern.

Therefore, preparing financial statements under these circumstances is a crucial responsibility of the management and accounting department as financial statement preparers. They must analyze all aspects of risk, adjust business strategies, manage liquidity, and assess the accounting value of assets and liabilities to reflect the true situation as rigorously as possible in accordance with financial reporting standards.

At the same time, auditors, as assurance providers, have a vital need to independently assess whether the economic impacts have been considered, assumed, and reflected appropriately in the financial statements and disclosures by the management. This ensures that financial statement users receive accurate and complete information, enabling them to make informed decisions in a highly uncertain economic environment.

The following table summarizes examples of potential impacts on businesses, as well as the management and accounting department’s guidelines. along with the audit perspectives that auditors commonly prioritize in responding to such risks.

Having read this far, many of you may be wondering which of these risks apply to your company’s financial statements, or the financial statements of the company you are currently auditing. Don’t worry! We have a “Checklist of 7 Key Issues from War” This tool serves as a guide for management and accounting departments in identifying early warning signs, planning risk mitigation, and comprehensively reviewing the business’s accounting entries. At the same time, it helps auditors visualize how to accurately and easily verify figures to address fluctuations.

Summary
The impact of current wars is not limited to countries in conflict zones but can affect businesses worldwide through energy prices, transportation costs, supply chains, and economic uncertainty.
Therefore, under these challenging circumstances, all sectors have roles and responsibilities that must be coordinated and aligned systematically:

• Management: Key responsibilities include assessing strategic risks, reviewing operational plans, managing liquidity, and setting direction to ensure business continuity.
• Accounting Department: Their primary responsibility is translating business impacts into accurate figures in accordance with financial reporting standards, reviewing the measurement of assets and liabilities (e.g., impairment, inventory, bad debts), and preparing transparent risk disclosures in financial statements.
• Auditors: Have the responsibility to independently assess risks, verify information, and ensure that financial statements accurately and reliably present the financial position and performance of the entity to reflect the reality.
  For financial statement users, the most important thing at this time is not just about acknowledging whether a business has been impacted, but about deeply understanding whether the management and accounting department have adequately assessed and reflected those impacts in the financial statements with the auditor providing an additional level of assurance and verification to ensure that financial statements remain the most powerful and reliable tool for business decision-making in the current challenging geopolitical and economic climate.

Source
Artificial intelligence (AI) was used as an assistant in preparing and editing the content. The author has reviewed and verified the accuracy of the content before publication.

Written and compiled by
Panthipa Paoyusuk
Dharmniti Auditing Co., Ltd.