Title: Does a venture capitalist influence auditor going concern decisions?

Authors: Geraldo Vasquez

Addresses: Department of Business Management, School of Business, State University of New York-Farmingdale State College, New York, USA

Abstract: A growing number of firms that go public are financially distressed often for several years of their initial existence, raising concerns about their ability to remain going concerns. Yet many IPOs do not receive going concern opinions (GCOs) from their auditors who are charged with assessing a client's going concern status, including a review of factors that may mitigate the need for a GCO. A key feature of IPOs is that a significant proportion of them are financed by venture capitalists (VCs). Accordingly, this study attempts to determine if a relationship exists between VCs and GCOs. Estimating multivariate logistic regression models, this study finds support that GCOs are assessed less often to financially distressed IPOs with venture capital backing and that the negative association between the presence of a VC and the issuance of a going concern opinion is stronger the greater the involvement of a VC.

Keywords: going concern opinion; GCO; auditor reporting behaviour; financial relationships; venture capitalists.

DOI: 10.1504/IJCA.2026.154598

International Journal of Critical Accounting, 2026 Vol.15 No.1, pp.42 - 81

Received: 16 Sep 2024
Accepted: 22 Jul 2025
Published online: 07 Jul 2026 *

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