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Impact of Companies' Financial Condition and Growth toward Acceptance of Going Concern Audit Opinion: Empirical Study at Company Listed in the Jakarta Islamic Index (JII)

Author

Listed:
  • Siti Maria Wardayati

    (Faculty of Economics and Business, University of Jember, Indonesia. Author-2-Name: Agung Budi Sulistiyo Author-2-Workplace-Name: Faculty of Economics and Business, University of Jember, Indonesia. Author-3-Name: Rahman El Junusi Author-3-Workplace-Name: Walisongo Islamic Univercsity of Semarang, Indonesia Author-4-Name: Alamsyah Author-4-Workplace-Name: Faculty of Economics and Business, University of Mataram, Indonesia Author-5-Name: Labitsta Untsa Afnany Author-5-Workplace-Name: Faculty of Economics and Business, University of Jember, Indonesia.)

Abstract

"Objective � This study aims to explain the companies' financial condition and growth which is affecting going concern audit opinion of the companies listed in the Jakarta Islamic Index (JII). Financial condition is examined through the information changes in working capital to total assets, retained earnings to total assets, earnings before interest and taxes to total assets, book value of equity to book value of total liabilities, sales to total assets. Methodology/Technique � This study applies qualitative research with a description method and the populations used are all companies listed in JII period 2014-2015. Findings � The results of the study explained that the companies' financial conditions affect going concern audit opinion. The worse the financial condition of the company, the greater the probability of companies to receive going concern audit opinion, and vice versa. An auditor will give a going concern audit opinion on companies that are experiencing financial difficulties. The growth of the companies affects going concern audit opinion. If the sales growth is negative, the continuity of the company will be unstable, because the company will be difficult to make profits. It can cause the financial conditions of the company experience difficulties, so that the company will receive going concern audit opinion. Novelty � The study contributes literature with its empirical findings in the context of Indonesia."

Suggested Citation

  • Siti Maria Wardayati, 2017. "Impact of Companies' Financial Condition and Growth toward Acceptance of Going Concern Audit Opinion: Empirical Study at Company Listed in the Jakarta Islamic Index (JII)," GATR Journals afr137, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:afr137
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    References listed on IDEAS

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    1. Arga Fajar Santosa & Linda Kusumaning Wedari, 2007. "Analisis Faktor-Faktor Yang Mempengaruhi Kecenderungan Penerimaan Opini Audit Going Concern," Jurnal Akuntansi dan Auditing Indonesia, Accounting Department, Faculty of Business and Economics, Universitas Islam Indonesia, vol. 11(2), pages 141-158, Desember.
    2. Arga Fajar Santosa & Linda Kusumaning Wedari, 2007. "Analisis Faktor-Faktor yang Mempengaruhi Kecenderungan Penerimaan Opini Audit Going Concern," Jurnal Akuntansi dan Auditing Indonesia, Accounting Department, Faculty of Business and Economics, Universitas Islam Indonesia, vol. 11(2).
    3. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    4. Edward I. Altman, 1968. "The Prediction Of Corporate Bankruptcy: A Discriminant Analysis," Journal of Finance, American Finance Association, vol. 23(1), pages 193-194, March.
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    More about this item

    Keywords

    Working Capital to Total Assets; Retained Earnings to Total Assets; Earnings Before Interest and Taxes to Total Assets; Book Value of Equity to Book Value of Total Liabilities; Sales to Total Assets and the Company's Growth.;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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