Nonprofit Stakeholder Response to Going-Concern Audit Opinions

• Autores: Keval Amin, Erica Harris
• Localización: Journal of Accounting Auditing and Finance, ISSN-e 2160-4061, ISSN 0148-558X, Vol. 32, Nº 3, 2017, págs. 329-349
• Idioma: inglés
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• Resumen

  • Using a sample of industry-diverse nonprofit organizations, we find support for stakeholders’ use of nonprofit going-concern audit opinion (GCO) reports. We study the reactions of the three largest nonprofit stakeholder groups: donors, service recipients, and managers. Our findings suggest that although large (sophisticated) donors respond negatively to a GCO, small (unsophisticated) donors contribute more following a GCO. We also find that service recipients spend more at service-oriented organizations than at charitable nonprofits following a GCO. Finally, managers respond to a GCO by increasing organizational efficiency at service-oriented organizations. Taken together, the evidence suggests that GCOs are informative in the nonprofit sector, and stakeholders’ responses to GCOs depend on stakeholder and organization type.