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

Author

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  • Lisa Cellica

    (Universitas Multimedia Nusantara, Indonesia Author-2-Name: Ratnawati Kurnia Author-2-Workplace-Name: Universitas Multimedia Nusantara, Indonesia)

Abstract

"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."

Suggested Citation

  • Lisa Cellica, 2016. "The Impact of Bankruptcy Prediction, Company�s Financial Condition, Previous Year Audit Opinion, Firm Size and Audit Tenure Towards Auditor�s Going Concern Opinion," GATR Journals afr117, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:afr117
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    References listed on IDEAS

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    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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    Cited by:

    1. Khalil Feghali & Reine Najem & Beverly Dawn Metcalfe, 2022. "Financial Auditing During Crisis: Assessing and Reporting Fraud and Going Concern Risk in Lebanon," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 21(4), pages 575-603, December.

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    More about this item

    Keywords

    Bankruptcy Prediction; Company�s Financial Condition; Previous Year Audit Opinion; Firm Size; Audit Tenure; Auditor�s Going Concern Opinion.;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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