6533b831fe1ef96bd1299779
RESEARCH PRODUCT
Audit quality and the going-concern decision-making process: Spanish evidence
Emiliano Ruiz-barbadilloMaría A. García-benauCristina De Fuentes-barberáNieves Gómez-aguilarsubject
Economics and EconometricsAuditor's reportActuarial sciencebusiness.industryEconomics Econometrics and Finance (miscellaneous)Inherent risk (accounting)Audit evidenceAccountingAudit planAuditor independenceExternal auditorQuality auditJoint auditAccountingBusiness Management and Accounting (miscellaneous)Business and International ManagementbusinessFinancedescription
In this study, we attempt empirically to investigate the relationship between audit quality and the probability that a financially distressed company would receive a going-concern opinion. Auditor decision-making in the presence of going-concern uncertainties may be characterized as a two-stage process. The first stage is the identification of a potential going-concern problem and the second stage is to determine whether the particular company should receive a qualified going-concern opinion. A sample of 1,199 non-financial Spanish company-years has been obtained from the database issued by the Stock Exchange National Commission for the fiscal years ending between December 1991 and December 2000. The results indicate that audit quality (measured by the auditor's level of independence and knowledge) affects the probability that a financially distressed company would receive a going-concern opinion. This probability is influenced not only by the auditor's ability to detect financial uncertainties, but also ...
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2004-12-01 | European Accounting Review |