Predicting Audit Opinion in Consolidated Financial Statements with Artificial Neural Networks

The models for predicting audit opinion analyze the variables that affect the probability of obtaining a qualified opinion. This helps auditors to plan revision procedures and control their performances. Despite their apparent relevance, existing models have only focused on the context of individual financial statements and none have referred to consolidated financial statements. The consolidated information is essential for decision-making processes and understanding the true financial situation of a company. Our objective is to provide a new audit opinion prediction model for consolidated financial statements. To this end, a sample of group of Spanish companies was chosen and an artificial neural network technique, the multilayer perceptron, was used. The results show that the developed method managed to predict the audit opinion with accuracy above 86%. Moreover, there exist important differences concerning the most significant variables in the audit opinion prediction for individual accounts, since when using consolidated financial statements, the variables referring to industry, group size, auditor, and board members were converted into the main explanatory parameters of the prediction.

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

AKRUAL Jurnal Akuntansi ◽

10.26740/jaj.v4n2.p139-154 ◽

2013 ◽

Vol 4 (2) ◽

pp. 139 ◽

Cited By ~ 1

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.

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AN EXPERIMENT MODEL OF CHANCE DISCOVERY FOR VISUALIZING THE FINANCIAL SITUATION AND TREND

New Mathematics and Natural Computation ◽

10.1142/s1793005710001670 ◽

2010 ◽

Vol 06 (02) ◽

pp. 209-228

Author(s):

TZU-FU CHIU ◽

CHAO-FU HONG ◽

YU-TING CHIU

Keyword(s):

Statistical Analysis ◽

Prediction Models ◽

Financial Statements ◽

Chance Discovery ◽

Integrated Map ◽

Financial Situation ◽

Financial Status ◽

The Public ◽

Public Offering ◽

A Company

In order to visualize the financial situation and trend of a company, an experiment model of chance discovery has been proposed, which enables the stakeholders inside and outside the business to recognize the performance of management and realize the possibility of investment. Usually, the statistical analysis and prediction models are common ways to understand the overall financial trend. Apart from analyzing the public offering financial statements directly, some visualization methods are potential approaches for stakeholders to understand the financial status intuitively. Chance discovery is one of the visualization methods which may be suitable for being applied in the exploration of financial status and trend. Using the experiment model, the annual and serial KeyGraphs as well as the trend diagram and integrated map were generated to depict the overview of the successive five-year scenario. Finally, the visualization of financial trend was then attained in this study.

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Upward Revaluation of Fixed Assets

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v4i1.2629 ◽

2011 ◽

Vol 4 (1) ◽

Author(s):

Zhemin Wang

Keyword(s):

Economic Value ◽

Financial Statements ◽

Fair Value ◽

International Accounting Standards ◽

Consolidated Financial Statements ◽

Book Value ◽

Fixed Assets ◽

Accounting Numbers ◽

Book Values ◽

A Company

Under the U.S. GAAP, fixed assets are reported at their book values which are derived by deducting accumulated depreciation from the original cost.  Companies are allowed to write down their fixed assets if the value of the fixed assets is impaired.  Under no circumstances can a company write up its fixed assets even if the market value of these assets exceeds their book value.  However, such upward revaluation is allowed under the International Accounting Standards (IAS).  Specifically, as an allowed alternative, IAS No.16, “Property, Plant & Equipment,” permits fixed assets to be revalued periodically and carried at fair value. Significant controversies currently exist regarding the revaluation provision under IAS No.16.  Critics of IAS No.16 have expressed concerns that revaluation of fixed assets is arbitrary and may be used by management to manipulate reported accounting numbers. To address such concerns, this study empirically assesses the reported fixed assets under IAS No.16.  Based on the data of 113 companies whose consolidated financial statements were prepared using IAS, this study documented significant empirical evidence suggesting that fixed assets reported by sample firms under IAS No. 16 reflect their economic value as perceived by investors.  The findings seem to support the use of IAS in preparation of financial statements for cross-border listing of securities.

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The Effect of Complexity of Consolidated Financial Statements on Audit Opinion Shopping

Korean Accounting Journal ◽

10.24056/kaj.2021.03.006 ◽

2021 ◽

Vol 30 (3) ◽

pp. 1-41

Author(s):

Kyung Soon Kim ◽

Jin Hwon Lee ◽

Seun Young Park

Keyword(s):

Financial Statements ◽

Consolidated Financial Statements ◽

Audit Opinion ◽

Opinion Shopping

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Pengaruh Informasi Rasio Keuangan dan OpiniAudit Tahun Sebelumnya Terhadap Penerimaan Opini Audit Going Concern

Jurnal ULTIMA Accounting ◽

10.31937/akuntansi.v7i2.182 ◽

2016 ◽

Vol 7 (2) ◽

pp. 75-93

Author(s):

Benedictus Wibisono Senosuryoputro ◽

Ratnawati Kurnia

Keyword(s):

Stock Exchange ◽

Financial Statements ◽

Financial Information ◽

Capital Adequacy ◽

Return On Assets ◽

Audit Opinion ◽

Going Concern ◽

Time Period ◽

Capital Adequacy Ratio ◽

A Company

This research as causal research studies conducted to establish a causal relationship between variables Quick Ratio, Loan to Deposit Ratio, Non-Performing Loans, Return on Assets, Capital Adequacy Ratio, and Prior Year Audit Opinion on the acceptance of going concern audit opinion. The object of this research is the banking companies listed in Indonesia Stock Exchange in 2008 - 2012. Samples were taken by using purposive sampling as many as 24 banking company. Criteria taken among companies that publish financial statements audited by an external auditor in the year 2008 - 2012 and has a poor financial ratios (LDR<78% and LDR> 92%, NPL>5%, ROA<1.2%, and CAR<8%) at least one time period between the years 2008-2012, in accordance with regulation of Bank Indonesia. This research use Regression logistic, because the dependent variable measured by nominal scale, therefore dummy model is used, where 1 is symbolized for a company that received going concern audit opinion, and 0 is symbolized for a company that not received going concern audit opinion. In testing the hypothesis can be seen that only the previous year's audit opinion variable which is non-financial information, have a significant influence on the acceptance of going concern audit opinion. While other variables such as Quick Ratio, Loan to Deposit Ratio, Non-Performing Loans, Return on Assets and Capital Adequacy Ratio which is a ratio of financial information, does not have a significant effect on the auditor in the provision of going concern audit opinion. Keywords: Acceptance of Going Concern Audit Opinion, Quick Ratio, Loan to Deposit Ratio, Non-Performing Loans, Return on Assets, Capital Adequacy Ratio, Prior Year Audit Opinion.

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Creating a Comprehensive Method for the Evaluation of a Company

Sustainability ◽

10.3390/su12219114 ◽

2020 ◽

Vol 12 (21) ◽

pp. 9114

Author(s):

Jakub Horak ◽

Tomas Krulicky ◽

Zuzana Rowland ◽

Veronika Machova

Keyword(s):

Financial Distress ◽

Financial Statements ◽

Comprehensive Method ◽

The Neural Network ◽

Economic Interpretation ◽

Relevant Variables ◽

Artificial Neural ◽

Mathematica Software ◽

A Company

For investment purposes, the evaluation of a company is not only a matter for a company itself, but also for shareholders and external persons. There are many methods for evaluating a company. This contribution therefore focuses on the creation of a comprehensive method for the evaluation of an industrial enterprise, one that can be used to predict potential future bankruptcies, using a dataset of financial statements of active companies and those in liquidation in the period 2015–2019. Artificial neural networks were used to process the data, specifically logistic regressions from the data processed in the Statistica and Mathematica software programmes. The results showed that the models created using the Mathematica software are not applicable in practice due to the parameters of the obtained results. In contrast, the artificial neural structures obtained using the neural network model in the Statistica software were prospective due to their performance, which is almost always above 0.8, and the logical economic interpretation of the relevant variables. All the generated and retained networks show excellent performance and few errors. However, one of the artificial structures, network no. 4 (MLP 16-16-2), produces better results than the others. Overall, accuracy is almost 81%. In the case of the classification of companies capable of surviving financial distress, accuracy is almost 90%, with that for the classification of companies at risk of going into bankruptcy at nearly 55%.

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DETERMINASI OPINI AUDIT DENGAN PENEKANAN GOING CONCERN PADA PERUSAHAAN MANUFAKTUR DI BURSA EFEK INDONESIA

BALANCE Jurnal Akuntansi dan Bisnis ◽

10.32502/jab.v2i2.1179 ◽

2017 ◽

Vol 2 (2) ◽

pp. 267

Author(s):

Hendra Firdaus

Keyword(s):

Positive Relationship ◽

Stock Exchange ◽

Negative Relationship ◽

Financial Statements ◽

Manufacturing Companies ◽

Study Objective ◽

Audit Opinion ◽

Going Concern ◽

Going Concern Opinion ◽

A Company

ABSTRACT Going concern opinion accepted by a company represents the condition and events which arises auditor’s hesitation of the company’s going concern. Going concern audit opinion can be used as early warning to the user of financial statements in order to prevent mistakes on decision making. A number of research has been conducted concerning factors that influence to going concern audit opinion. Yet, its result keeps showing inconsistency. This study objective is to reinvestigate factors that influence going concern audit opinion. The factors used on this research are liquidity, leverage, profitability, company’s size, company’s growth, audit lag, and auditor client tenure.This research using sample of manucaturing companies listed on Indonesia Stock Exchange during 2012-2016. Based on purposive sampling, there are 30 manufacturing companies which fulfilled the sample requirements. Hypotesis testing on this research was done by the logistic regression analysis.The hypotesis testing showed that leverage have positive relationship to going concern audit opinion. Variables of profitability have negative relationship to going concern audit opinion. Variables of liquidity, company’s size, company’s growth, audit lag and auditor client tenure have no relationship to going concern audit opinion.

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PENGARUH OPINION SHOPPING DAN PENGALAMAN AUDITORTERHADAP PENERIMAAN OPINI AUDIT GOING CONCERN DALAM SISI PANDANG PERUSAHAAN AUDITAN

Jurnal Akuntansi ◽

10.24912/ja.v19i3.82 ◽

2017 ◽

Vol 19 (3) ◽

pp. 311

Author(s):

Febrian Kwarto

Keyword(s):

Early Warning ◽

Sampling Technique ◽

Financial Statements ◽

Audit Opinion ◽

Purposive Sampling ◽

Going Concern ◽

Analysis Technique ◽

Opinion Shopping ◽

A Company ◽

Public Accountant

Perusahaan yang mendapatkan opini going concern dari auditor di sebabkan karena kondisi dan peristiwa yang menimbulkan keraguan akan kelangsungan hidup suatu perusahaan. Opini audit going concern merupakan peringatan awal (early warning) bagi para pengguna laporan keuangan guna menghindari kesalahan pengambilan keputusan. Penerimaan opini audit going concern dapat di pengaruhi oleh opinion shopping dan pengalaman Auditor. Penelitian ini bertujuan menganalisis opinion shopping dan pengalaman Auditor terhadap penerimaan opini audit going concern pada perusahaan auditan. Teknik pengambilan sampel dalam penelitian ini adalah purposive sampling yaitu pimpinan perusahaan atau kepala keuangan (kepala accounting/manajer keuangan) yang sudah diaudit oleh Kantor Akuntan Publik di Kota Tangerang, yang memiliki Pengalaman minimal 2 tahun. Jumlah kuesioner yang dianalisis adalah 50 kuesioner. Teknik analisis data yang digunakan dalam penelitian ini adalah analisis regresi berganda. Berdasarkan hasil penelitian ini menunjukan bahwa opinion shopping berpengaruh positif dan signifikan terhadap penerimaan opini audit going concern. Sedangkan pengalaman Auditor tidak berpengaruh positif dan tidak signifikan terhadap penerimaan opini audit going concern.Companies that get the of the auditor's going concern opinionwas caused of conditions and events that give rise to doubts about the viability of a company. Going concern audit opinion is an early warning for the users of the financial statements in order to avoid decision-making errors. Going concern audit opinion can be influenced by the opinion shopping and Auditorexperience. This study aimed to analyze the opinion shoppingand Auditor experienceon going concern audit opinion on the company's audited. The sampling technique in this research was purposive sampling, there arethe director of the company or chief financial officer (chief accounting/finance managers) that have been audited by Public Accountant in Tangerang, which has a minimum of 2 years experience. The number of questionnaires analyzed were 50 questionnaires. The data analysis technique used in this study is multiple regression analysis. Based on the results of this study indicate that opinion shopping have positive and significant impact on going-concern audit opinion. While there is no positif and significant impact on the going-concern audit opinion

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Pengaruh Pertumbuhan Perusahaan, Prediksi Kebangkrutan dan Opini Audit Going Concern Tahun Sebelumnya Terhadap Pemberian Opini Audit Going Concern

Jurnal Ilmiah Pendidikan Scholastic ◽

10.36057/jips.v5i1.463 ◽

2021 ◽

Vol 5 (1) ◽

pp. 51-60

Author(s):

Gina Septiana ◽

Eka Khausnul Khatimah

Keyword(s):

Logistic Regression ◽

Financial Statements ◽

Significant Positive Effect ◽

Manufacturing Companies ◽

Audit Opinion ◽

Going Concern ◽

Negative Effect ◽

Company Growth ◽

A Company ◽

Positive Effect

Going concern audit opinion is an opinion issued by a company regarding the feasibility of its company's financial statements to see the future. This study aims to examine company growth, bankruptcy predictions and previous year's going concern audit opinion on the provision of Going Concern audit opinion on manufacturing companies listed on the IDX. This study uses a sample of manufacturing companies listed on the IDX in 2015-2019. Based on positive sampling, the number of manufacturing companies used in this study were 57 companies. Hypothesis testing uses logistic regression using the Spss 23 program. The results of this study indicate that company growthas going concern audit opinion, bankruptcy prdition has a significant negative effect going concern audit opinion and previous year”s going concern audit opinion has a significant positive effect on going concern audit opinion

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Pengaruh Kondisi Keuangan, Audit Tenure, dan Ukuran KAP terhadap Opini Audit Going Concern pada Perusahaan Manufaktur yang Terdaftar di BEI Tahun 2012-2016

Jurnal Maksipreneur Manajemen Koperasi dan Entrepreneurship ◽

10.30588/jmp.v7i2.361 ◽

2018 ◽

Vol 7 (2) ◽

pp. 117

Author(s):

Maria Dini Yanuariska ◽

Aloysia Yanti Ardiati

Keyword(s):

Stock Exchange ◽

Financial Statements ◽

Manufacturing Companies ◽

Audit Opinion ◽

Going Concern ◽

Financial Condition ◽

Negative Effect ◽

A Company ◽

Positive Effect ◽

Public Accountant

Going concern audit opinion is the survival of a company. A company that is considered unable to maintain its survival will receive going concern audit opinion. This opinion is bad news for users of financial statements (Astuti and Darsono, 2012). This research was conducted at manufacturing companies listed in Indonesia Stock Exchange from 2012 until 2016. Based on the criteria of research sample, it was obtained 400 research samples. The purpose of this research was to discover the effect of financial condition, audit tenure, and the size of public accountant office on going concern audit opinion. The results of this study indicated that the financial condition had a positive effect on going concern audit opinion, audit tenure had negative effect on going concern audit opinion, and the size of public accountant office had no effect on going concern audit opinion.

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