Consequences of Going Concern Opinion for Financial Reports of Business Firms and Capital Markets with Auditor Reputation as a Moderation Variable - An Experimental Study

Abstract

This research aims to observe the consequences of going concern opinion (GCO) and examine the role of specialist accounting firms for the financial reports of business firms and capital markets. The research is based on an experimental study consisting of 107 undergraduate and graduate students who were asked to act as financial analysts. The GCO consequence for the financial reports of business firms is that the stock price of the corresponding firms will decline, but the decline will be smaller if the financial reports are audited by specialist accounting firms. The GCO consequence for rival firms is that the stock prices of the rival firms will rise if other companies in the same industry receive GCO, but the increase will be smaller if the companies receiving GCO are audited by specialized accounting firms. The GCO consequences of the capital markets is that the stock prices of all companies, the composite index and the market participants will increase, but the presence of a specialized accounting firm has not been proven to strengthen the market participants' willingness to participate further in the stock market.

The Follow Up of Auditing Results, Accountability of Financial Reporting and Mediating Effect of Financial Loss Rate: An Empirical Study in Indonesian Local Governments

“…When the legitimacy of the organization becomes diminished, it will have consequences for the reduced flow of resources received and the adverse impact on the achievement of organizational goals. Therefore, it is important for organizations to design and manage organizational institutions to protect or maintain legitimacy (Gabrini, 2013;Deegan, 2002;Setyawati et al, 2017;Hapsoro and Suryanto, 2017). This is also in line with Power's (2003) statement which states that with increasing demands on current organizational transparency and accountability the audit plays an important role in producing legitimacy.…”

Balanced Budget System: Organizational and Financial Tools

“…As a result this reduces the economic growth rate, increases inflationary pressure and potential of macroeconomic dynamics. Many economists believe that it is the volatility of macroeconomic indicators that serves as a dominant condition of the "resource curse" paradox in emerging markets (Hapsoro and Suryanto, 2017).…”

The Affect Good Corporate Governance, Debt Default, Auditor Client Tenure, Audit Delay On Audit Going Concernopinion

“…This opinion is known as GCO.Conditions and events that trigger the auditor to issue GCOare also stated in SA 570. Research on the GCOusually focuses on (1) auditor judgment in determining whether the auditor needs to modify the audit opinion by giving an explanation about the viability, (2) errors that may occur in the issuance of GCO, (3) individual GCOconsequences for companies receiving GCO(announcing firms), (4) GCOconsequences for other companies in the same industry (rival firms) (Hapsoro and Suryanto, 2017). According (Carson et al, 2013), many firms that received GCOduring 2000 to 2010 have survived for at least one year.…”