Costs Associated With Going-Concern-Modified Audit Opinions: An Analysis of the Australian Audit Market.

• Autores: Peter Carey, Marshall A. Geiger, Brendan T. O'Connell
• Localización: Abacus: A journal of accounting, finance and business studies, ISSN 0001-3072, Vol. 44, Nº 1, 2008, págs. 61-81
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Dialnet Métricas: 4 Citas
• Resumen

  • This article examines the potential costs to Australian auditors and their clients from the issuance of first-time going-concern-modified audit opinions. We examine the population of Australian companies receiving a first-time going-concern-modified audit opinion during the period 1994–97 and a matched sample of financially distressed firms receiving a clean audit opinion. Results indicate that auditor switching is positively associated with receipt of a going-concern-modified opinion. However, we find no empirical evidence that there is a self-fulfilling prophecy of increased probability of company failure following the issuance of a going-concern-modified opinion for the Australian companies in our study. Our analyses of lost audit fees indicate that auditors issuing first-time going-concern-modified audit opinions lost proportionately more fees by losing clients (through switching or company failure) than firms not issuing a going-concern-modified opinion to financially stressed clients. [ABSTRACT FROM AUTHOR]