A multiple discriminant analysis of the auditor’s going concern opinion: the case of audit opinions in Italy

Abstract

Purpose The purpose of this paper is to develop a model for assessing the audit evidence of the going-concern (GC) assumptions underlying the preparation of financial statements. Design/methodology/approach This research analyses 678 audit opinions of Italian listed firms from 2007 to 2016 and uses a multiple linear discriminant analysis to create a GC score, which includes variables suggested by the international standards on auditing (ISA) 570 and by literature on GC. Findings The model provides three cut-off scores which can orient auditors towards issuing the most appropriate GC audit opinions (unmodified opinion, unmodified opinion, which includes emphases of matter, qualified opinion or disclaimer of opinion). Research limitations/implications The development of the model is mainly based on public data and does not assess confidential information that is not disclosed in audit opinions. Practical implications This model can enable auditors to identify the most appropriate GC opinion and align auditor’s opinions in similar circumstances, thereby reducing their reliance on discretion and increasing the reliability of their judgement with a higher degree of accuracy. Moreover, this research lists additional events or conditions that may individually or collectively cast significant doubt on GC assumptions. Originality/value This study goes beyond the traditional decision-making process, apparently binary in nature, between “continuity” and “failure” or between “unmodified” and “modified” opinions. It is conceived to detect the different degrees of uncertainty that affect GC evaluations to orient auditors’ professional judgements.

Examining Community Trust to the Audit Board of the Republic of Indonesia

“…A quality public accounting firm is considered to have high expertise to detect material misstatements contained in financial statements. KAP size affects the quality of opinion stated by auditors [17]. KAP size reflects the quality of audit opinion that can affect investors in Stock investment.…”

Peran Moderasi Prio Opinion Terhadap Hubungan Prediksi Kebangkrutan Dengan Opini Audit Going Concern

“…Selain itu, terdapat masalah keuangan di perusahaan tersebut akan tetapi masih bisa beroperasi usahanya. (Maffei et al, 2020). Standar Profesional Akuntan Publik (SPAP) 2011 opini audit going concern yaitu opini audit yang diberikan auditor indepeden dengan modifikasi serta terdapat ketidakmampuan.atau ketidakpastian keberlangsungan perusahaan.…”

“…Sehingga, apabila suatu perusahaan melalui opini audit going concern tidak memperbaiki kinerja keuangan maka perusahaan tersebut cenderung menerima kembali opini pengauditan going concern. Hasil studi ini senada pada studi sebelumnya oleh (Maffei, 2020); (Kurnia dan Cellica, 2016) yang menemukan hasil bahwasanya prior opinion berdampak positif pada opini audit going concern.…”

أثر التعدیلات فى شکل ومحتوى تقریر مراقب الحسابات وفقاً لمعیار المراجعة الدولی رقم (570) المعدل لسنة 2015 بشأن الإستمراریة على قراری الإستثمار ومنح الإئتمان: دراسة تجریبیة

“…; Bédard et al,2019;Bava & di Trana,2019; (Bundy,2019Akande et al,2020Casterella et al,2020;Dhaliwal et al,2020;Maffei et al,2020 (Guillamon,2003;Pucheta et al,2004;carcello et al,2009;Omri et al,2011;Kabajeh et al .2012;Feldmann&Read,2013;Christensen et al,,2014;Gyau et al ,2016;Chen Trpeska et al ,2017;Sirois et al, ck, 2016;et (Pucheta et al,2004;carcello et al, 2009;Bhimani et al,2009;Omri et al, 2011;Kabajeh et al, (Noghondari and Foong, 2013;Sormunen,2014;Miazee et al,2014;Mishra& Metilda,2015;Boolaky & Quick,2016;Trpeska et al,2017;Almilia and Wulanditya,2017;Samad,2017;Näsman, 2019 Sig. (2-tailed) .…”