Disclosure of interim review reports: Do interim going concern conclusions have information content?

2021 ◽  
Author(s):  
Matthew Grosse ◽  
Tom Scott
Keyword(s):  
Information Content ◽  
Annual Report ◽  
Market Reaction ◽  
Financial Statements ◽  
Relevant Information ◽  
Audit Opinion ◽  
Going Concern ◽  
Significant Difference ◽  
Incremental Information ◽  
Review Reports

This paper examines the information content of interim review assurance in the Australian mandatory disclosure setting. First, we find a strong negative market reaction to interim going concern conclusions (IGCC) contained in the review of interim financial statements. Second, we find no significant difference between the market reaction to IGCCs and annual going concern opinions (AGCO) received at the annual report audit. Finally, we show IGCCs are significant predictors of subsequent AGCOs, and provide incremental information from the previous annual report audit opinion. Overall, these results contribute to the literature on the benefits of mandatory interim assurance by showing that going concern conclusions contained in interim financial statements provide investors with new and relevant information.

Pengaruh Kualitas Auditor, Kondisi Keuangan, Kepemilikan Perusahaan, Disclosure, Pertumbuhan Perusahaanm dan Debt Default terhadap Penerimaan Opini Audit Going Concern

2016 ◽  
Vol 8 (2) ◽  
pp. 89-110
Author(s):  
Elia Hinarno ◽  
Maria Stefani Osesoga
Keyword(s):  
Annual Report ◽  
Stock Exchange ◽  
Financial Statements ◽  
Research Use ◽  
Audit Opinion ◽  
Nominal Scale ◽  
Going Concern ◽  
Financial Condition ◽  
Debt Default ◽  
External Auditor

The objective of this study was to obtain empirical evidence about the effect of auditor’s quality, financial condition, company’s ownership, disclosure, company’s growth, and debt default on the acceptance of going concern audit opinion. The object of this study is the manufacture companies listed in Indonesia Stock Exchange in 2011 -2014. Samples of this research were taken by using purposive sampling as many as 8 manufactures company. Criteria taken among companies that publish annual report with financial statements audited by an external auditor in the year 2011 – 2014, financial statements period is begin on 1 January and ended on 31 December, using rupiah as a currency, and have a net loss at least 2 periods in a row. This research use regression logistic, because the dependent variable measured by nominal scale. In testing the simultaneous significant auditor’s quality, financial condition, institutional’s ownership, managerial’s ownership, disclosure, company’s growth, and debt default have significant effect towards going concern audit opinion. In T test, in partial, the independent variabel auditor’s quality, financial condition, institutional’s ownership, managerial’s ownership, disclosure, company’s growth, and debt default, does not have a significant effect on the auditor in the provision of going concern audit opinion. Keywords: Auditor’s Quality, Company’s Growth, Debt Default, Disclosure, Financial Condition, Going Concern, Institutional’s Ownership, Managerial’s Ownership.

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

Management Going Concern Disclosure, Mitigation Plan, and Failure Prediction - Implications from ASU 2014-15

2021 ◽  
Author(s):  
Jingjing Wang
Keyword(s):  
Textual Analysis ◽  
Market Reaction ◽  
Failure Prediction ◽  
Financial Statements ◽  
Annual Reports ◽  
Debt Restructuring ◽  
Going Concern ◽  
Future Viability

The going concern (GC) assumption forms the basis for preparing financial statements unless liquidation becomes imminent. ASU 2014-15 requires management to evaluate GC uncertainties quarterly and provide disclosures in the notes. I compare management GC disclosures between the pre-standard and post-standard regimes. I find that the market reacts negatively to substantial doubt in GC only after ASU 2014-15. Next, I find the effect of ASU 2014-15 for quarterly reports, but not annual reports. More importantly, by employing detailed textual analysis to extract and categorize mitigation-plan discussions, I show that certain types of management mitigation plans are interpreted more positively by investors after ASU 2014-15, thereby alleviating the negative market reaction. These plans include issuing debt, debt restructuring, increasing revenue, and selling assets. Finally, I demonstrate that management GC conclusions are more indicative of corporate failures after ASU 2014-15 and that mitigation-plan discussions are associated with firms' future viability.

scholarly journals Audit Committee’s Role in Moderating the Effect of Financial Distress Towards Going Concern Audit Opinion

2020 ◽  
Vol 11 (4) ◽  
pp. 432
Author(s):  
Anna Kania Widiatami ◽  
Nanny Dewi Tanzil ◽  
Cahya Irawadi ◽  
Ahmad Nurkhin
Keyword(s):  
Financial Distress ◽  
Audit Committee ◽  
Supervisory Board ◽  
Financial Statements ◽  
Audit Opinion ◽  
External Auditors ◽  
Going Concern ◽  
Negative Effect ◽  
Audit Opinions ◽  
Relationship Of

Auditors are required to provide services in auditing financial statements presented by management and provide audit opinions on the fairness of the presentation of financial statements. Sometimes, in reality, management and auditors have their interests so that each party can achieve the goals. The conflict of interest appears on the independence of the auditor in issuing audit opinions, especially the audit opinion with the going concern explanatory paragraph. The audit committee, as a supervisory board, will continue to maintain the independence of the auditor in issuing audit opinions with the going concern explanatory paragraph. This study aims to examine the effectiveness of the audit committee in maintaining the independence of external auditors issuing audit opinions, especially the audit opinion with the going concern explanatory paragraph. Based on the purposive sampling method obtained a sample of 168 companies. Testing the hypothesis in this study using logistic regression and moderated regression analysis. The results showed that financial distress had a significant negative effect for the audit opinion with going concern explanatory paragraph. Furthermore, the audit committee was not able to strenghten the relationship of financial distress on the audit opinion with a going-concern explanatory paragraph.

scholarly journals The Effects Of Hindsight Bias On Auditors Confidence In Going-Concern Judgments And On The Audit Opinion Decision

2011 ◽  
Vol 9 (9) ◽  
pp. 1 ◽  
Author(s):  
Kim L. Anderson
Keyword(s):  
Hindsight Bias ◽  
Financial Statements ◽  
Experimental Methodology ◽  
Audit Opinion ◽  
Probability Judgments ◽  
Going Concern ◽  
Auditing Standards ◽  
One Year ◽  
Made In

This paper examines the extent to which hindsight bias influences auditors confidence in their going-concern judgments and the resulting audit opinion decision. According to auditing standards, auditors are required to determine if substantial doubt exists regarding an audit clients likelihood of continuing as a going concern for one year from the date of the financial statements being audited. If substantial doubt does exist, an unqualified opinion modified with an explanatory paragraph describing the going-concern issue is required. Prior research indicates that auditors are prone to hindsight bias when making going-concern judgments. Hindsight bias is the tendency for individuals who have been provided the outcome of an event to overstate their abilities to have predicted that outcome in foresight. Prior research assumes that the presence of hindsight bias creates overconfidence and that this overconfidence will influence the audit opinion decision and will adversely affect the accuracy of subsequent probability judgments made in foresight. This assumption has never been tested, however, and non-hindsight studies found in the confidence literature suggest that the assumption might not hold true for experienced professionals, such as auditors. Using an experimental methodology, this study finds that auditors are prone to hindsight bias, but finds no evidence that this bias leads auditors to be overconfident in their going-concern judgments, nor does the bias influence their opinion decisions.

scholarly journals Pengaruh Reputasi Auditor, Prediksi Kebangkrutan, Disclosure Dan Leverage Terhadap Penerimaan Opini Audit Going Concern

2013 ◽  
Vol 4 (2) ◽  
pp. 139 ◽  
Author(s):  
Eko Budi Santoso ◽  
Ivan Yudhistira Wiyono
Keyword(s):  
Hypothesis Testing ◽  
Financial Statements ◽  
Bankruptcy Prediction ◽  
Observation Data ◽  
Study Objective ◽  
Audit Opinion ◽  
Going Concern ◽  
Score Model ◽  
A Company ◽  
Auditor Reputation

AbstractGoing concern opinion is accepted by a company represents the condition and events which arises auditor’s hesitation of the company’s going concern. Going concern audit opinion used as early warning to the user of financial statements in order to prevent mistakes on decision making. This study objective was to reinvestigate factors that influencing going concern audit opinion. The factors used on this research are auditor reputation, bankruptcy prediction, disclosure and leverage.Samples were collected with purposive sampling method and obtained 229 observation data of listed manufacture companies that meet the criteria from year 2009-2011. Logistic regression was been used for hypothesis testing. The result showed that bankruptcy prediction using Z-score model and leverage affected acceptance going concern audit opinion. The hypothesis testing also showed that auditor reputation and disclosure did not affect acceptance going concern audit opinion.

scholarly journals OPINI AUDIT GOING CONCERN DAN FAKTOR-FAKTOR YANG MEMPENGARUHINYA

2019 ◽  
Vol 1 (1) ◽  
pp. 24-43
Author(s):  
I Ketut Sunarwijaya ◽  
I Putu Edy Arizona
Keyword(s):  
Stock Exchange ◽  
Sampling Technique ◽  
Financial Statements ◽  
Company Size ◽  
Audit Opinion ◽  
Analysis Techniques ◽  
Going Concern ◽  
Auditor Switching ◽  
Regression Techniques ◽  
Company Growth

Going concern audit opinion is an opinion issued by the auditor because there are several factors in maintaining going concern of the company. Opinion audit going concern be one example for users of financial statements to be used in decision making. This study aims to determine the effect of cash, liquidity, leverage, audit lag, auditor switching, company growth, and company size on audit audits. This research was conducted on companies that produce on the Indonesia Stock Exchange in 2014-2017. The sampling technique used was purposive sampling technique with the number of research samples as much as 117. The data analysis techniques were logistic regression techniques. The results showed that the variables of cash, liquidity, leverage, audit leg, switching auditors, company growth, and size did not affect the audit.

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