The Factors Affecting the Acceptance of Going Concerned Audit Opinion (Empirical Study on Registered Agricultural Sector Companies in Indonesia Stock Exchange 2013-2019)

The study aimed to determine and analyze the effect of financial distress, firm size, profitability, cash flow ratio, leverage, and environmental performance on going concern audit opinion. The research object is the agriculture sector company listed on the Indonesia Stock Exchange (IDX). The population in this study were all companies listed in the agricultural sector on the Indonesia Stock Exchange for the 2013-2019 period. The total population in this study was 21 companies. The method used in determining the sample using the purposive sampling technique. The sample in the study was 17 companies with 119 data analyzed. The study used secondary data and used multivariate analysis. The results of this research state that financial distress, profitability, cash flow ratio, environmental performance do not affect the acceptance of going concern audit opinion. The firm size has a negative effect on the acceptance of going concern audit opinions. In contrast, leverage positively affects the acceptance of going concern audit opinions in the agriculture sector listed on the Indonesia Stock Exchange (IDX) for 2013-2019. Keywords: financial distress, firm size, profitability, flow ratio cash, leverage, going concern audit opinion.

Pengaruh Ukuran Perusahaan, Likuiditas, Profitabilitas, dan Solvabilitas Terhadap Opini Audit Going Concern pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Tahun 2018-2020

The continuity of the compant’s business among the various risk that arise as a result of internal or external factors are the expectations of all entities in effort to achieve the company’ goals. The purpose of this study is to find out what the effect of company size, liquidity, solvency and profitability on Going Concern audit opinion of manufacturing companies listed on the Indonesia Stock Exchange for the 2018-2020 period. Secondary data is used from the Indonesia Stock Exchange, the source of data is from www.idx.co.id. In this study, the sampling method selected according to the purposive sampling method was used and 44 companies were selected as samples. Data analysis using Logistic Regression test. The results showed that the size, liquidity, profitability and solvency of the company affected the Going Concern audit opinion.

D, Determinan Peran Ukuran Perusahaan pada Determinan Voluntary Auditor Switching

ABSTRACT This study aims to find the effect of Financial Distress, Management Change, KAP Size, Audit Opinion on Voluntary Auditor Switching, moderated by Company Size. The objects in this study are companies included in the manufacturing sector, which were listed on the Indonesia stock exchange during 2014-2018, with 95 companies. The sampling method used in this study was purposive sampling. The collected data were analyzed using descriptive analysis and statistical analysis techniques using the WarpPLS 5.0 program. The results showed that Financial Distress, Change of Management, Audit Opinion did not affect Voluntary Auditor Switching. At the same time, KAP Size, Company Size had a significant adverse effect on voluntary auditor switching. Company size was found to moderate the financial distress of Voluntary Auditor Switching and Management Change, homologize moderation, KAP size is the predictor moderation of Voluntary Auditor Switching. It is recommended for further research to increase the number of research samples, range of research times, and indicators of each variable. ABSTRAK Penelitian ini bertujuan untuk mengetahui pengaruh Financial Distress, Pergantian Manajemen, Ukuran KAP, Opini Audit Terhadap Voluntary Auditor Switching dengan Moderasi Ukuran Perusahaan. Objek pada penelitian ini adalah perusahaan yang masuk dalam sektor manufaktur yang terdaftar pada bursa efek Indonesia selama tahun 2014-2018, dengan jumlah 95 perusahaan. Metode pengambilan sampel yang digunakan dalam penelitian ini adalah purposive sampling. Data yang terkumpul dianalisis dengan tehnik analisis deskriptif dan analisis statistik, dengan menggunakan program WarpPLS 5.0. hasil penelitian menunjukkan bahwa Financial Distress, Pergantian manajemen, opini audit tidak berpengaruh terhadap Voluntary Auditor Switching, sedangkan Ukuran KAP, Ukuran perusahaan berpengaruh negative signifikan terhadap voluntary auditor switching. Ukuran Perusahaan ditemukan sebagai mampu memoderasi financial distress Voluntary Auditor Switching dan Pergantian Manajemen, homologise moderation, Ukuran KAP predictor moderation terhadap Voluntary Auditor Switching. Disarankan untuk penelitian selanjutnya meningkatkan jumlah sampel penelitian, rentan waktu penelitian, dan indikator masing-masing variabel.

Auditing and earnings management in New Zealand

<p>The research summarised in this thesis focuses on two research issues of particular importance to the New Zealand economy. First, the thesis examines the impact of audit factors on the level of earnings management. Second, the thesis empirically assesses the relationship between the level of earnings management and the audit fees charged by audit firms. In the empirical work summarised in this thesis I use the absolute value of discretionary accruals (DACCs) as a proxy for earnings management. I estimate DACCs for each sample firm by using the modified Jones (1991) model. Moreover, several auditor characteristics have been employed in the thesis as proxies for auditor quality and independence. I use a BIG4 dummy variable (that equals 1 if the auditor is a Big 4 audit firm and 0 otherwise), an AOFFICE dummy variable (that equals 1 if the audit firm’s office is located in Wellington or Auckland and 0 otherwise), an AO dummy variable (that equals 1 if the client firm receives a qualified or conditional audit opinion and 0 otherwise) and a FISCAL dummy variable (that equals 1 if the client firm’s fiscal year-end falls in the period from March to June and 0 otherwise) as proxies for audit quality. I also use a RNAF variable (as measured by the ratio of non-audit fees to total fees paid) and a C_AUDITOR dummy variable (that equals 1 if a client firm changes its audit firm and 0 otherwise) as proxies for auditor independence in relation to the level of DACCs. The empirical results summarised in the thesis show that the level of DACCs is significantly and negatively associated with the BIG4 and AOFFICE variables. This result is consistent with the common perception that higher quality auditors will lead to a higher audit quality and that this in turn will reduce level of DACCs. I also find a positive and statistically significant relationship between the FISCAL variable and the level of DACCs. This result indicates that DACCs are likely to be higher if the audit is conducted during the busy audit season. The empirical results summarised in the thesis also show a positive and significant relationship between the audit opinion (AO) variable and the level of DACCs. This means that a qualified or conditional audit opinion is more likely to occur if the financial statements involve a relatively higher level of DACCs. However, the empirical results summarised in the thesis report an insignificant relationship between the level of DACCs and the C_AUDITOR and RNAF variables. These results mean that auditor independence does not appear to have any impact on the level of DACCs. In part two of this thesis, I examine whether the level of DACCs in the current year is associated with the level of the audit fee in the next ensuing year. Here it is well known that each year the auditor will review both the general and specific factors affecting their audit responsibilities in relation to a particular audit client. Hence, the agreed audit fee for the next ensuing year is likely to reflect information about the level of earnings management in prior years and of how the issues arising out of these earnings management procedures have been resolved between the client firm and the audit firm. In order to test this hypotheses, I employ the audit fee model of Simunic (1980) as refined by Choi et al. (2009), Francis and Simon (1987), Hay et al. (2006b) and Menon and Williams (2001). As expected, the second set of empirical results summarised in the thesis show a positive and statistically significant relationship between the level of DACCs in the current year and the level of the audit fee in the next ensuing year. This means that a high level of DACCs in the current year will impact positively on the level of the audit fee in the next ensuing year.</p>

Auditing and earnings management in New Zealand

<p>The research summarised in this thesis focuses on two research issues of particular importance to the New Zealand economy. First, the thesis examines the impact of audit factors on the level of earnings management. Second, the thesis empirically assesses the relationship between the level of earnings management and the audit fees charged by audit firms. In the empirical work summarised in this thesis I use the absolute value of discretionary accruals (DACCs) as a proxy for earnings management. I estimate DACCs for each sample firm by using the modified Jones (1991) model. Moreover, several auditor characteristics have been employed in the thesis as proxies for auditor quality and independence. I use a BIG4 dummy variable (that equals 1 if the auditor is a Big 4 audit firm and 0 otherwise), an AOFFICE dummy variable (that equals 1 if the audit firm’s office is located in Wellington or Auckland and 0 otherwise), an AO dummy variable (that equals 1 if the client firm receives a qualified or conditional audit opinion and 0 otherwise) and a FISCAL dummy variable (that equals 1 if the client firm’s fiscal year-end falls in the period from March to June and 0 otherwise) as proxies for audit quality. I also use a RNAF variable (as measured by the ratio of non-audit fees to total fees paid) and a C_AUDITOR dummy variable (that equals 1 if a client firm changes its audit firm and 0 otherwise) as proxies for auditor independence in relation to the level of DACCs. The empirical results summarised in the thesis show that the level of DACCs is significantly and negatively associated with the BIG4 and AOFFICE variables. This result is consistent with the common perception that higher quality auditors will lead to a higher audit quality and that this in turn will reduce level of DACCs. I also find a positive and statistically significant relationship between the FISCAL variable and the level of DACCs. This result indicates that DACCs are likely to be higher if the audit is conducted during the busy audit season. The empirical results summarised in the thesis also show a positive and significant relationship between the audit opinion (AO) variable and the level of DACCs. This means that a qualified or conditional audit opinion is more likely to occur if the financial statements involve a relatively higher level of DACCs. However, the empirical results summarised in the thesis report an insignificant relationship between the level of DACCs and the C_AUDITOR and RNAF variables. These results mean that auditor independence does not appear to have any impact on the level of DACCs. In part two of this thesis, I examine whether the level of DACCs in the current year is associated with the level of the audit fee in the next ensuing year. Here it is well known that each year the auditor will review both the general and specific factors affecting their audit responsibilities in relation to a particular audit client. Hence, the agreed audit fee for the next ensuing year is likely to reflect information about the level of earnings management in prior years and of how the issues arising out of these earnings management procedures have been resolved between the client firm and the audit firm. In order to test this hypotheses, I employ the audit fee model of Simunic (1980) as refined by Choi et al. (2009), Francis and Simon (1987), Hay et al. (2006b) and Menon and Williams (2001). As expected, the second set of empirical results summarised in the thesis show a positive and statistically significant relationship between the level of DACCs in the current year and the level of the audit fee in the next ensuing year. This means that a high level of DACCs in the current year will impact positively on the level of the audit fee in the next ensuing year.</p>

The Impact of Firm Size on the Effect of Industry Specialization, Audit Opinion and the Size of a Public Accounting Firm (KAP) on Audit Delay in Mining Companies

Many previous researchers have studied the factors causing audit delays such as company size, nature of company, audit firm size, industry specialization and etc, and the results are still inconsistent. Even researchers found that this phenomenon is still happening as many public companies did that listed on the Indonesian stock exchange. This study aims to determine the effect of industry specialization, audit opinion and size of Public Accounting Firm (KAP) on Audit Delay with firm size as a moderating variable. The sampling technique used purposive sampling and involved 33 mining companies listed on the Indonesian stock exchange. The data analysis method used moderated regression analysis (MRA). The results showed that Industrial Specialization had a positive effect on audit delay. Audit opinion does not affect audit delay. The size of the Public Accounting Firm (KAP) has a positive effect on audit delay. Firm size has no effect on audit delay. Our assumption that firm size is a moderating variable is not proven.

Kualitas Audit, Profitabilitas, Leverage Dan Struktur Kepemilikan Terhadap Opini Audit Going Concern

This research is aimed to find empirical evidence of the effect of audit quality, profitability, leverage and ownership structure on going concern audit opinions on manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2017 – 2019. The population of this study is 187 listed manufacturing companies. on the Indonesia Stock Exchange in 2017 – 2019. Using purposive sampling, the sample from this study became 100 manufacturing companies with sample criteria: manufacturing companies listed on the Indonesia Stock Exchange in 2017 – 2019 with complete data and no losses during the period study. This research method uses a quantitative approach with data analyzed using logistic regression. The results obtained are that Audit Quality and Leverage partially have a significant effect on Going Concern Audit Opinions in manufacturing companies listed on the Indonesia Stock Exchange in 2017 - 2019. Profitability and Ownership Structure partially have no effect on Going Concern Audit Opinions in listed manufacturing companies. on the Indonesia Stock Exchange in 2017 – 2019. Audit Quality, Profitability, Leverage, Ownership Structure simultaneously affect the Going Concern Audit Opinion in manufacturing companies listed on the Indonesia Stock Exchange in 2017 – 2019.

The Effect of Company Size, Company Growth, Financial Conditions, Debt Default And Audit Opinion 2016-2019 on Going Concern Audit Opinions (Empire Study of Trading Companies Listed on The Indonesia Stock Exchange)

The purpose of this study is to see the effect of company size, company growth, financial condition and debt default on going concern audit opinions in 2016-2019 on trading companies listed on the Indonesia Stock Exchange, both partially and simultaneously. Every company has financial statements that aim to provide information regarding the financial position of a company that is useful for a large number of users of financial statements in making economic decisions which are prepared periodically for interested parties. The population in this study has all trading companies listed on the IDX for the 2016-2019 period, which are 47 companies and the sample is 100 units of analysis. The research method applies multiple logistic regression analysis techniques. The results of the study show that the company size variable partially influences the going concern audit opinion on trading sector companies listed on the Indonesia Stock Exchange for the 2016-2019 period. Variables of company growth, financial condition and debt default partially do not affect going concern audit opinion on trading sector companies listed on the Indonesia Stock Exchange for the 2016-2019 period. Variables Company Size, Company Growth, Financial Condition and Debt Default together affect the going concern audit opinion on trading sector companies listed on the Indonesia Stock Exchange for the 2016-2019 period.

Financial distress as a moderating variable of the influence of audit opinion and public accounting firm size on voluntary auditor switching

Purpose - This study aims to examine the effect of financial distress as a moderator of the effect of audit opinion and public accounting firm (KAP) size on auditor switching in companies listed on the Jakarta Islamic Index (JII) for the 2014-2019 period.Method - This study uses a sample of companies listed on the Jakarta Islamic Index (JII) for the 2014-2019 period. The number of companies sampled in this study were 12 companies. In this study, the researchers used a quantitative type of model and used the Statistical Package for Social Science (SPSS) version 16 for analyzing the data.Result - The results show that audit opinion and public accounting firm size have no effect on auditor switching, financial distress is not able to moderate the effect of audit opinion with auditor switching, and financial distress is not able to moderate the relationship between public accounting firm size and auditor switching.Implication - For stakeholders in motivating management to retain or replace auditors from various factors that are considered including audit opinion, public accounting firm size and financial distress.Originality - The object used in this study is a list of companies registered on JII. There is a 2-year additional period from the previous study, which was 4 years to 6 years. The measuring instrument for the financial distress variable used in this study is the Altman Z-score.

Disclosure of interim review reports: Do interim going concern conclusions have information content?

This paper examines the information content of interim review assurance in the Australian mandatory disclosure setting. First, we find a strong negative market reaction to interim going concern conclusions (IGCC) contained in the review of interim financial statements. Second, we find no significant difference between the market reaction to IGCCs and annual going concern opinions (AGCO) received at the annual report audit. Finally, we show IGCCs are significant predictors of subsequent AGCOs, and provide incremental information from the previous annual report audit opinion. Overall, these results contribute to the literature on the benefits of mandatory interim assurance by showing that going concern conclusions contained in interim financial statements provide investors with new and relevant information.