Analysis of Going Concern Audit Opinion Receiving Trends at Property Companies in Indonesia

Abstract

Responsibilities of auditors currently do not only focus on assessing the fairness of financial statements and detecting fraud, but also assess the company's ability to maintain its survival. "This is due to the demands of the shareholders to the auditor to provide early warning about the prospects of a company as consideration before deciding on an investment decision". This study aims to determine the effect of financial distress, debt default, and company size on going concern audit opinion. This research uses quantitative research methods. This research data uses secondary data through documentation and literature studies. "The population in this study are property companies listed on the Indonesia Stock Exchange in 2016-2018. "The sample in this study amounted to 171 observational data from 57 companies selected using the purposive sampling method"The analysis used in this study is logistic regression analysis at the 5% significance level. "The results of hypothesis testing show that financial distress and company size do not affect going concern audit opinion, while debt default has a significant positive effect on going concern audit opinion".

The Influences of Company�s Growth, Cash Flow, and Debt Default on the Acceptance of Going Concern Audit Opinions

“…The findings agree with those acquired from the prior investigation conducted by Alifiah et al (2020), Puspaningsih &Analia (2020), andSimbolon &Andriyanto (2020), the acceptability of going concern audit opinions is positively influenced by debt default. Suppose a company goes into default or does not pay its principal and interest when it's due.…”

“…Suppose a company goes into default or does not pay its principal and interest when it's due. In that case, it could cause much uncertainty about the company's chances of staying in business, which is required the auditor to spend a going concern audit opinion (Simbolon et al, 2020).…”

“…If a company has an immense debt, most of the cash flow in the company is being used to repay the loans. Per the research carried out by Alifiah et al (2020), Puspaningsih & Analia (2020), and Simbolon & Andriyanto (2020) stated that debt default positively influences the going concern audit opinions.…”