Introduction of the article
From 2013, the global coal price has decreased significantly caused by the declining coal consumption and many researches indicate that the sharp decline in coal price is structural rather than cyclical which means, unlike what the government and the coal fraternity said, demand may not rebound. Under such circumstance, the Australian coal producer, Peabody Energy is under a huge financial distress risk.
In four years, the equity market value of Peabody has fallen from $US17 billion to $US2.46 billion. On that equity value, Peabody is carrying $US5.5 billion in net debt along with retired workers' pension liabilities of $US735 million.
However, Peabody Energy continue to pay dividends for their shareholders in order to attract further investment while their liabilities are increasingly at risk. Peabody Energy Corp, in 2 May 2015, had an Altman Z-Score (global measure of financial distress) of 0.71 compare to its highest score of 3.04. It is in distress zone (when the score is less than 1.81), implying possible bankruptcy in the next two years.

The First key account: Accounts payable
According to the article, because of the unfavourable global market circumstances, Peabody Energy was not able to repay its debt which leads to a result that Peabody is now carrying huge liabilities ($US5.5 billion net debt). So the accounts payable is definitely the key account gets involved in the financial distress (West 2014).
The two prime assertions most at risk would be completeness and valuation and allocation. For completeness assertion, under the financial distress, the company may try to hide some liabilities for creating a ‘better’ amount of its net debt, so it is critical for the auditor to ensure that all liabilities that should be recorded have been recorded. With the same concern, given that Peabody’s retired workers'