Investor Dissatisfaction toward Auditors

2002 ◽  
Vol 17 (2) ◽  
pp. 111-136 ◽  
Author(s):  
Barbara J. Sainty ◽  
Gary K. Taylor ◽  
David D. Williams
Keyword(s):  
Audit Opinion ◽  
Subsequent Change ◽  
Going Concern ◽  
Going Concern Opinion ◽  
High Level ◽  
Selection Of

Shareholders, as owners of the firm, often are sought to ratify management's selection of an auditor through a formal vote during the annual shareholders' meeting. This vote represents the primary vehicle for investor communication concerning auditor-related issues and, thus, can be used as an indicator of investor dissatisfaction with the auditor. This study proposes to measure shareholders' dissatisfaction with the auditor through the shareholders' auditor ratification vote. We identify attributes associated with high levels of investor dissatisfaction and then determine if a high level of investor dissatisfaction is associated with a subsequent change in a firm's auditor. We determined that investor dissatisfaction is associated with a firm having engaged a less credible auditor and the issuance of a going concern audit opinion. In addition, we find that investors react strongly to the unexpected issuance of a going concern opinion. Finally, we discovered that managers are sensitive to shareholder dissatisfaction signals by noting a higher occurrence of auditor changes for firms with high investor dissatisfaction.

scholarly journals Pengaruh Rasio Profitabilitas, Rasio Likuiditas, Pertumbuhan Perusahaan Terhadap Opini Audit Going Concern

2021 ◽  
Vol 13 (2) ◽  
pp. 283-299
Author(s):  
Kimberli Kimberli ◽  
Budi Kurniawan
Keyword(s):  
Stock Exchange ◽  
Secondary Data ◽  
Financial Statements ◽  
Audit Opinion ◽  
Going Concern ◽  
Analysis Technique ◽  
Going Concern Opinion ◽  
Company Growth ◽  
The Relationship ◽  
Profitability Ratios

Abstract The problems that will be discussed in this journal are regarding the relationship between Profitability Ratios, Liquidity Ratios and Company Growth on Audit Delay. The research method used in this study uses secondary data. The population in this study is all Real Estate companies and the Property sub-sector registered on the BEI which are listed on the Indonesia Stock Exchange in 2017, 2018, 2019 and 2020. The sampling method in this study is purposive sampling. The criteria for companies that are sampled are companies that publish audited financial statements for four consecutive years and use the rupiah currency, so that the total number of samples in this study is 165 data. The independent variables in this study are Profitability Ratios, Liquidity Ratios and Company Growth. The dependent variable in this study is audit delay. The data analysis technique used is the Logistics Regression Test with the use of Software Eviews 10. The results of the analysis show that profitability has no significant effect on going concern audit opinion. Meanwhile, company growth and liquidity have no effect on going concern audit opinion. Keywords: Going Concern Opinion, Profitability, Liquidity, and Company Growth

scholarly journals PENGARUH PENERAPAN GOOD CORPORATE GOVERNANCE, OPINION SHOPPING, KUALITAS AUDIT, DAN AUDIT CLIENT TENURE TERHADAP PENERIMAAN OPINI AUDIT GOING CONCERN AUDITING

2019 ◽  
Vol 2 (2) ◽  
Author(s):  
Panggah Wira Angkasa ◽  
Dewi Indriasih ◽  
Baihaqi Fanani
Keyword(s):  
Logistic Regression ◽  
Research Result ◽  
Institutional Ownership ◽  
Audit Opinion ◽  
Quality Audit ◽  
Going Concern ◽  
Opinion Shopping ◽  
Going Concern Opinion ◽  
Infrastructure Services ◽  
The Impact

The Impact of Good Governance, Opinion Shopping, Quality Audit and Audit Client Tenure Application towards Going Concern Opinion Audit Acceptance (Empirical Studies on Infrastructure Services Company, Utility, and Transportation which Registered at Indonesian Stock Exchange (ISE) during 2013 – 2017 Period). Essay. Tegal: Economic & Business Faculty, Pancasakti University Tegal. 2018. The aim of this research is to finding out the impact of institutional ownership, independent commissioner, committee audit, opinion shopping, quality audit, audit client tenure towards going concern’s opinion audit on infrastructure services company, utility, and transportation which registered at ISE during 2013 – 2017 period. The population in this research are infrastructure services company, utility, and transportation which registered at ISE during 2013 – 2017 period and the sample determination by using purposive sampling method, so within the result obtained 15 company’s samples. The data analysis method used is logistic regression analysis. Based on logistic regression analytic, the research result concluded that institutional ownership (0,109), audit committee (0,429), opinion shopping (0,607), and quality audit (0,998) are not affecting the going concern opinion audit. Meanwhile, the independent commissioner (0,006), and audit client tenure (0,004) are affecting the going concern opinion audit. Keywords: going concern, opinion audit, institutional ownership, independent commissioner, committee audit, opinion shopping, quality audit, audit client tenure

The analysis of influencing factors on the going concern audit opinion – a study in manufacturing firms in Indonesia

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Thomas Averio
Keyword(s):  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Sampling Technique ◽  
Manufacturing Firms ◽  
Annual Reports ◽  
Content Type ◽  
Audit Opinion ◽  
Going Concern ◽  
Going Concern Opinion

PurposeIt is argued that the going concern opinion is issued if auditors have a doubt about financial condition of a company. Provision of the going concern audit opinion may worsen the company in terms of gaining public trust and may even indicate bankruptcy. This study aims to determine the factors that affect the auditor's going concern opinion.Design/methodology/approachThis research used secondary data obtained from annual reports and independent audit reports published by the Indonesia Stock Exchange. The population of this research included manufacturing firms registered in the Indonesia Stock Exchange from 2015 to 2019. The sample after the purposive sampling technique being applied consisted of 33 companies. The data were analyzed using logistic regression performed in the statistical analysis software, SPSS 24.0.FindingsThe results indicated that leverage positively affected the going concern audit opinion, then the audit quality, profitability and liquidity negatively affected the going concern audit opinion, whereas firm size and audit lag did not affect the going concern audit opinion.Originality/valueThis study is in contrast to several existing studies on the determinants of the auditor's going concern opinion and provides knowledge on developing more factors affecting the auditor's going concern opinion.

The Auditor's Going-Concern Opinion as a Communication of Risk

2011 ◽  
Vol 30 (2) ◽  
pp. 77-102 ◽  
Author(s):  
Allen D. Blay ◽  
Marshall A. Geiger ◽  
David S. North
Keyword(s):  
Financial Distress ◽  
Balance Sheet ◽  
Control Sample ◽  
Data Availability ◽  
Market Valuation ◽  
Audit Opinion ◽  
Going Concern ◽  
Income Statement ◽  
Going Concern Opinion ◽  
Distressed Firms

SUMMARY In this study, we examine the proposition that the auditor's going-concern modified opinion is a valuable risk communication to the equity market that results in a shift of the market's perception of financially distressed firms. Specifically, our analyses reveal that the market valuation is significantly altered from a focus on both the income statement and balance sheet to a balance sheet-only focus in the year a company receives a first-time going-concern modified opinion. These results hold even after controlling for several common measures of financial distress and when examining a larger control sample of distressed firms. We also document that the market devalues a company's inventory and places increased weight on cash, receivables, and long-term assets and liabilities as a result of the auditor's modification. This indicates that the going-concern modification provides incremental information specifically related to abandonment or adaptation risk. Our results provide evidence that the market interprets the going-concern modified audit opinion as an important communication of risk that results in a substantial shift in the structure of the market valuation for distressed firms. Data Availability: All data are available from public sources. JEL Classifications: M41.

scholarly journals The Impact of Bankruptcy Prediction, Company’s Financial Condition, Previous Year Audit Opinion, Firm Size and Audit Tenure Towards Auditor’s Going Concern Opinion

2016 ◽  
Vol 1 (1) ◽  
pp. 51-58
Author(s):  
Lisa Cellica ◽  
Ratnawati Kurnia
Keyword(s):  
Firm Size ◽  
Stock Exchange ◽  
Secondary Data ◽  
Jel Classification ◽  
Bankruptcy Prediction ◽  
Audit Opinion ◽  
Going Concern ◽  
Financial Condition ◽  
Going Concern Opinion ◽  
The Impact

Objective – The auditor is responsible for obtaining sufficient audit evidence about the accuracy and proper use of the going concern assumption from the company’s management through its financial statements. These evidence are used for the purpose of deciding whether there are material uncertainties about the entity's ability to maintain the continuity of its business. Thus, the objective of this paper is to examine the impact of bankruptcy prediction, company’s financial condition, previous year audit opinion, firm size and audit tenure towards Auditor’s going concern opinion. Methodology/Technique – The object of this paper is the service companies listed on the Indonesia Stock Exchange for the period of 2011-2014. This paper uses secondary data and samples taken were determined based on the purposive sampling method. The regression logistic is used to analyse data. Findings – The results of this research show that bankruptcy prediction, company’s financial condition, previous year audit opinion, firm size, and audit tenure all simultaneously, have a significant impact towards Auditor’s going concern opinion, particularly Previous Year Audit Opinion. Novelty – This paper provides insights into the factors affecting auditors in providing a going concern opinion in the case of Indonesian companies. Type of Paper: Empirical Keywords: Bankruptcy Prediction; Company’s Financial Condition; Previous Year Audit Opinion, Firm Size; Audit Tenure; Auditor’s Going Concern Opinion. JEL Classification: D81, M42.

scholarly journals The Effect of Financial Distress, Firm Growth, and Previous Year’s Opinion on The Firm’s Going Concern Opinion

2021 ◽  
Vol 58 (1) ◽  
pp. 247-258
Author(s):  
Amiruddin, Grace T. Pontoh, Marina Lauren
Keyword(s):  
Financial Distress ◽  
Firm Growth ◽  
Stock Exchange ◽  
Secondary Data ◽  
Substantial Impact ◽  
Audit Opinion ◽  
Going Concern ◽  
Service Companies ◽  
Going Concern Opinion ◽  
The Impact

This research aims to examine and determine the impact of financial distress, firm growth, and opinion on previous year to firms‘going concern. The study was carried on service companies that are listed on Indonesia Stock Exchange during 2015-2017. A total of 210 samples were selected using the purposive sampling method. This research utilizes secondary data in the form of the firm’s financial statements and independent auditor’s reports. This research utilized logistic regression analysis to process the data. Results showed that financial distress and previous year’s opinion has significantly affect the firm’s going concern audit opinion while the firm growth has no substantial impact on the firm’s going concern audit opinion. Simultaneously, financial distress, firm growth, and previous year's opinion significantly affected the firm's going concern opinion.

scholarly journals The Effect of Financial Distress, Debt Default and Audit Tenure on Going Concern Opinion

2019 ◽  
Vol 8 (4) ◽  
pp. 1049-1054
Keyword(s):  
Financial Distress ◽  
Stock Exchange ◽  
Statistical Tests ◽  
Secondary Data ◽  
Manufacturing Companies ◽  
Audit Opinion ◽  
Going Concern ◽  
Debt Default ◽  
Going Concern Opinion ◽  
Negative Effect

One of the accounting assumptions is going concern. Going concern is how company can survive in long time business operation. Going concern becomes very crucial for users of financial statements, namely investors and creditors. If the company in which the investor invests funds and the creditors lend their funds is bankrupt, then the investment and credit lent are in vain and the investor and creditor suffer losses. This study aims to examine the effect of financial distress, debt default, and audit tenure on the acceptance of going concern audit opinion in the period 2014-2018. This study uses secondary data from manufacturing companies financial report which listed in Indonesian Stock Exchange, using purposive sampling method, we obtained 28 companies that are feasible, so that the sample from the study amounted to 140 samples. Statistical tests were performed using SPSS version 24.0 using logistic regression analysis. The results of this study show that financial distress variables have a significant negative effect while debt default and audit tenure have a positive effect on the acceptance of going-concern audit opinion.

scholarly journals Pengaruh Leverage, Opini Audit Tahun Sebelumnya, Pertumbuhan Perusahaan, dan Ukuran Perusahaan terhadap Opini Audit Going Concern

Owner ◽  
2021 ◽  
Vol 5 (1) ◽  
pp. 164-173
Author(s):  
Kusuma Indawati Halim
Keyword(s):  
Stock Exchange ◽  
Company Size ◽  
Manufacturing Companies ◽  
Audit Opinion ◽  
Going Concern ◽  
Additional Information ◽  
Financial Condition ◽  
Going Concern Opinion ◽  
Audit Reports ◽  
Company Growth

Audit reports are used by auditors to inform the accuracy of the information in the financial statements. The auditor as an independent party has the competence to provide an opinion on the client's financial condition. If it is estimated that the company cannot continue its activities, it is likely that it will get a going concern audit opinion. Audit opinion can help investors and other stakeholders in assessing the status of the company's business continuity. The important thing from a going concern audit opinion is to provide additional information for investors in making investment decisions. This study analyzes the factors that determine going concern audit opinion on manufacturing companies listed on the Indonesia Stock Exchange. The factors tested in this study are leverage, initial opinion, company growth and company size. The study used a sample of 125 companies for the 2014-2018 period. The results of data analysis were obtained from logistic regression tests. The empirical results show that prior opinion and leverage increase the likelihood of receiving a going concern opinion. Meanwhile, company growth and company size have no effect on going concern audit opinion. Nagelkerke's R Square test shows the ability of the factors in this study to explain 63.1% of going-concern audit opinion, while 36.9% is explained by other factors outside the research model. The findings from this study are expected to help investors and other stakeholders to prevent losses if they invest in companies that have the potential to go bankrupt.

scholarly journals GOING CONCERN COMPANY AND ITS RELATION TO SUSTAINABILITY REPORT DISCLOSURE: EVIDENCE FROM SOEs IN INDONESIA

2019 ◽  
Vol 3 (01) ◽  
pp. 12
Author(s):  
Saktiana Rizki Endiramurti ◽  
Achmad Budiman Rosadi ◽  
Agung Nur Probohudono
Keyword(s):  
Regression Analysis ◽  
Panel Data ◽  
Sustainability Reporting ◽  
Firm Characteristics ◽  
Statistical Tool ◽  
Audit Opinion ◽  
Going Concern ◽  
Going Concern Opinion ◽  
The Relationship ◽  
Sustainability Report

This study refers to the issue that is happening in Indonesian State-Owned Enterprises (SOEs), especially in the case of going concern. The purpose is to provide empirical evidence about the relationship between going concern companies and corporate characteristics on the disclosure of sustainability report. The sample used is a non-financial SOEs company in Indonesia, consisting of 54 companies during the period 2014-2016. This study employs regression analysis of panel data with statistical tool Eviews version 9.0. The results support three out of four research hypotheses, in which going concern audit opinion and firm characteristics assessed through firm size and age had significant influence on sustainability report disclosure. This indicates that the larger and longer the company stands, the company will present the sustainability reporting more fully. The more complete presentation of sustainability reporting becomes one of the important factors for the auditor in determining going concern opinion in its report.

scholarly journals The Influence of Previous Audit Opinion, Audit Tenure and Liquidity toward Going Concern Opinion in Manufacturing Companies for the Period of 2015-2017

2019 ◽  
Vol 3 (1) ◽  
pp. 1
Author(s):  
Cindy Saputra Kuswara ◽  
Ery Yanto
Keyword(s):  
Logistic Regression ◽  
Regression Analysis ◽  
Logistic Regression Analysis ◽  
Significant Influence ◽  
Manufacturing Companies ◽  
Analysis Method ◽  
Audit Opinion ◽  
Going Concern ◽  
Going Concern Opinion ◽  
The Relationship

Going Concern Opinion issued by auditor when there is doubt of a company’s ability to continue as going concern. This research have the objective to determine the relationship between Previous Audit Opinion, Audit Tenure and Liquidity with Going Concern Opinion in manufacturing companies listed in IDX form years 2015 until 2017. The population of this research is 156 with total of sample are 37 manufacturing companies. The research of data using descriptive statistic and logistic regression analysis method. The result shows that Previous Audit Opinion and Liquidity have significant influence toward Going Concern Opinion and Audit Tenure does not have significant influence toward Going Concern Opinion.

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