Analysis of going concern modified audit report in Indonesia and Singapore
by Martin Surya Mulyadi; Shiella Budiawan
International Journal of Business and Globalisation (IJBG), Vol. 20, No. 1, 2018

Abstract: Audit reports are very useful for both internal and external decision makers as they provide assurance over financial reports which often reflect the going-concern ability of a company. Going-concern-modified audit reports are seen as a credible signal from auditors regarding the financial condition of the company. This research analyses determinants of going-concern-modified audit reports in Indonesia and Singapore. Despite the difference of these two countries, our findings show similar evidence in both countries. Even though prior studies document that companies' characteristics, companies' financial performance and auditors' characteristics may determine the issuance of going-concern-modified audit reports, it is not evident in our study. Despite these variables, we found that the previous year audit report is a significant determinant of issuance of a going-concern- modified audit report. This suggests that this report is a credible signal of a company's financial distress.

Online publication date: Thu, 14-Dec-2017

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