Does a Manager Respond to a Going-Concern Audit Opinion with an Asymmetry in Gain and Loss?

In this paper, I investigate the relationship between previous going-concern audit opinions and subsequent asymmetric timeliness in accounting. Using the time-series and price-based models and conservatism proxy, I find that firms with going-concern audit opinions subsequently report losses in a more timely manner than firms that did not receive going-concern audit opinions. Furthermore, I also find that firms exiting going-concern audit opinions are more likely to report losses rather than gains in a timely manner, compared to firms non-exiting from going-concern opinions. This study extends the prior research by exploring the association between going-concern opinions and accounting conservatism from the perspective of client firms—that is, how firms behave strategically and conservatively to bypass going-concern opinions, once the firms had received previous going-concern opinions.

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

Jurnal Akuntansi Maranatha ◽

10.28932/jam.v13i2.3901 ◽

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

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The moderating role of audit quality on the relationship between auditor reporting and earnings management: empirical evidence from Tunisia

EuroMed Journal of Business ◽

10.1108/emjb-03-2020-0024 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Fakhfakh Imen ◽

Jarboui Anis

Keyword(s):

Earnings Management ◽

Audit Quality ◽

Stock Exchange ◽

Generalized Least Squares ◽

Content Type ◽

Audit Opinion ◽

Before And After ◽

Audit Opinions ◽

Auditor Reporting ◽

The Relationship

PurposeThe purpose of this study is to examine the interrelationship between modified audit opinions and earnings management as measured by discretionary accruals and develop a thorough understanding regarding the moderating effect of audit quality on this relation.Design/methodology/approachThis study uses a sample of Tunisian listed firms on the Tunis Stock Exchange during 2006–2013. Four models are developed and tested by using panel logistic and Feasible Generalized Least Squares (FGLS) regressions.FindingsThe results show that earnings management increases the likelihood of receiving a modified audit opinions. Then firms receiving modified audit opinions manage earnings more than those receiving clean opinions. It is also discovered that audit quality moderates the relationship between audit opinion and earnings management.Practical implicationsThis paper contributes to the literature of both audit and management studies and represents the first effort to examine the relation between audit opinion and earnings management, with audit quality as a moderating variable.Originality/valueThis study extends existing research on earnings management and audit opinion. Thus, this study has the potential to help stakeholders, board of directors, regulators and auditors, who are related with enhancing the supervision of firms and reducing the opportunities given to managers, to engage in earnings management. It constitutes an addition to previous knowledge about audit opinion in the Tunisian context before and after revolution.

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

International Journal of Financial Research ◽

10.5430/ijfr.v11n4p432 ◽

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.

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

International Journal of Economics Business and Accounting Research (IJEBAR) ◽

10.29040/ijebar.v3i01.376 ◽

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.

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

JAAF (Journal of Applied Accounting and Finance) ◽

10.33021/jaaf.v3i1.674 ◽

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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Nonprofit Stakeholder Response to Going-Concern Audit Opinions

Journal of Accounting Auditing & Finance ◽

10.1177/0148558x15604989 ◽

2015 ◽

Vol 32 (3) ◽

pp. 329-349 ◽

Cited By ~ 11

Author(s):

Keval Amin ◽

Erica E. Harris

Keyword(s):

Nonprofit Organizations ◽

Nonprofit Sector ◽

Organizational Efficiency ◽

Audit Opinion ◽

Going Concern ◽

Stakeholder Groups ◽

Service Oriented ◽

Audit Opinions

Using a sample of industry-diverse nonprofit organizations, we find support for stakeholders’ use of nonprofit going-concern audit opinion (GCO) reports. We study the reactions of the three largest nonprofit stakeholder groups: donors, service recipients, and managers. Our findings suggest that although large (sophisticated) donors respond negatively to a GCO, small (unsophisticated) donors contribute more following a GCO. We also find that service recipients spend more at service-oriented organizations than at charitable nonprofits following a GCO. Finally, managers respond to a GCO by increasing organizational efficiency at service-oriented organizations. Taken together, the evidence suggests that GCOs are informative in the nonprofit sector, and stakeholders’ responses to GCOs depend on stakeholder and organization type.

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Drivers of going concern audit opinions: empirical evidence from Indonesia

HOLISTICA – Journal of Business and Public Administration ◽

10.1515/hjbpa-2017-0015 ◽

2017 ◽

Vol 8 (2) ◽

pp. 79-90

Author(s):

Lina Rahmawati Suroto ◽

Hadri Kusuma

Keyword(s):

Empirical Evidence ◽

Audit Opinion ◽

Going Concern ◽

Financial Condition ◽

The Future ◽

Audit Opinions

Abstract The study of the going concern audit opinions is an important component within the enhancement of firms’ responsibility and stewardship. A going concern audit opinions implies that the independent auditor doubt the future of the firm. This study aimed to examine the drivers of the likelihood of the going-concern audit opinions. Previous studies revealed that there were inconsistent drivers influencing the going-concern audit opinion. This study shows similar results to prior works. The result indicates that firms’ financial condition and profitability significantly affect the likelihood of the going-concern audit opinion, while firms’ size and leverage are not the determinants of the intensity of the going concern audit opinion.

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Managerial Overconfidence And Going-Concern Modified Audit Opinion Decisions

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v31i6.9471 ◽

2015 ◽

Vol 31 (6) ◽

pp. 2123

Author(s):

Gayoung Ji ◽

Jong Eun Lee

Keyword(s):

Positive Association ◽

Market Uncertainty ◽

Factors Affecting ◽

Audit Opinion ◽

Going Concern ◽

Distressed Firms ◽

Financially Distressed ◽

Managerial Overconfidence ◽

First Time ◽

The Relationship

We examine how auditors perceive managerial overconfidence during audit reporting by testing the relationship between managerial overconfidence and the likelihood of issuing a first-time going-concern modified audit opinion to financially distressed firms. After controlling for the factors affecting auditor’s going-concern modified audit opinion decision, we find that the likelihood of issuing a first-time going-concern modified audit opinion is positively associated with managerial overconfidence, suggesting that auditors adversely value overconfident management in financially distressed firms and thus tend to issue a first-time going-concern modified audit opinion to them. We also find that the positive association above is reinforced with capital market uncertainty.

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The Effect of Company Size, Company Growth, Financial Conditions, Debt Default And Audit Opinion 2016-2019 on Going Concern Audit Opinions (Empire Study of Trading Companies Listed on The Indonesia Stock Exchange)

Journal of Economics, Finance and Management Studies ◽

10.47191/jefms/v4-i11-29 ◽

2021 ◽

Vol 04 (11) ◽

Author(s):

Charles Ayu Kartika Kinata ◽

Keyword(s):

Stock Exchange ◽

Multiple Logistic Regression Analysis ◽

Financial Statements ◽

Company Size ◽

Audit Opinion ◽

Going Concern ◽

Financial Condition ◽

Debt Default ◽

Audit Opinions ◽

Company Growth

The purpose of this study is to see the effect of company size, company growth, financial condition and debt default on going concern audit opinions in 2016-2019 on trading companies listed on the Indonesia Stock Exchange, both partially and simultaneously. Every company has financial statements that aim to provide information regarding the financial position of a company that is useful for a large number of users of financial statements in making economic decisions which are prepared periodically for interested parties. The population in this study has all trading companies listed on the IDX for the 2016-2019 period, which are 47 companies and the sample is 100 units of analysis. The research method applies multiple logistic regression analysis techniques. The results of the study show that the company size variable partially influences the going concern audit opinion on trading sector companies listed on the Indonesia Stock Exchange for the 2016-2019 period. Variables of company growth, financial condition and debt default partially do not affect going concern audit opinion on trading sector companies listed on the Indonesia Stock Exchange for the 2016-2019 period. Variables Company Size, Company Growth, Financial Condition and Debt Default together affect the going concern audit opinion on trading sector companies listed on the Indonesia Stock Exchange for the 2016-2019 period.

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FAKTOR-FAKTOR YANG MEMPENGARUHI KECENDERUNGAN PENERIMAAN UNQUALIFIED OPINION WITH MODIFIED PARAGRAPHGOING CONCERN

JMB : Jurnal Manajemen dan Bisnis ◽

10.31000/jmb.v5i1.1987 ◽

2019 ◽

Vol 5 (1) ◽

Author(s):

Yunita Yunita ◽

Deasy Ariyanti Rahayuningsih

Keyword(s):

Sampling Method ◽

Audit Quality ◽

Stock Exchange ◽

Secondary Data ◽

Financial Statement ◽

Audit Opinion ◽

Going Concern ◽

Financial Condition ◽

Debt Default ◽

The Relationship

The purpose of this study is to investigate empirically the relationship between audit quality, company’s financial condition, prior audit opinion, company’s growth, company’s size, and debt default that influence the company’s acceptance of unqualified opinion with modified paragraph going concern. Data to be used is secondary data and were taken from Indonesia Stock Exchange official website. The research used 42 non-financial companies as sample by using purposive sampling method. This study used logistic regression to test the hypothesis. Data for this study comprises from the financial statement of non-financial companies in Indonesia over four year period of 2008-2011. The research finding can be summarized as follows. The result showed that the prior audit opinion has significant influence over unqualified opinion with modified paragraph going concern. On the other hand, audit quality, company’s financial condition, company’s growth, company’s size, and debt default don’t have influence on unqualified opinion with modified paragraph going concern.

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