Title: Analysis of going concern modified audit report in Indonesia and Singapore

Authors: Martin Surya Mulyadi; Shiella Budiawan

Addresses: Bina Nusantara University, Jakarta, Indonesia ' Bina Nusantara University, Jakarta, Indonesia

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.

Keywords: going-concern; going-concern-modified audit reports; audit reports; financial condition; financial distress; Indonesia; Singapore.

DOI: 10.1504/IJBG.2018.088667

International Journal of Business and Globalisation, 2018 Vol.20 No.1, pp.120 - 127

Received: 26 May 2016
Accepted: 22 Aug 2016

Published online: 05 Dec 2017 *

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