Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Is Going Concern a Concern?: Auditors' Propensity to Issue Going Concern Warnings
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
2013 (English)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Purpose The purpose of this study is to assess auditors’ propensity to issue going concern warnings and whether it is affected by company-specific or auditor independence factors. Company-specific factors are restricted to two variables; client industry and financial distress. Auditor independence factors are restricted to two variables; audit tenure and audit firm size.

Design/methodology/approach – The quantitative study is based on annual reports from 400 Swedish limited companies.

Findings – The result shows that going concern warnings were received by 18 % of the 400 bankrupt companies. In the investigation of company-specific factors it is found that the number of going concern warnings issued by auditors varies between different industries. Furthermore, the number of going concern warnings increases with the level of financial distress. In the investigation of auditor independence factors, it is found that a longer audit tenure results in less going concern warnings and that larger audit firms issue more going concern warnings.

Research limitations/implications – The research utilizes data collected from Swedish limited companies that filed for bankruptcy during 2011 and 2012.

Practical implications – The identified low accuracy of going concern warnings and the possible auditor independence threats contribute to the notion of distrust regarding the social function that auditors need to fulfill.

Originality/value – Compared to the US, going concern warnings are rather unexplored in the Swedish context. The study extends previous research by examining both company-specific and independence factors, since these are regarded as interdependent dimensions of the audit process.

Place, publisher, year, edition, pages
2013.
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-21290OAI: oai:DiVA.org:hj-21290DiVA, id: diva2:624239
Subject / course
IHH, Business Administration
Supervisors
Examiners
Available from: 2013-06-24 Created: 2013-05-30 Last updated: 2013-06-24Bibliographically approved

Open Access in DiVA

No full text in DiVA

By organisation
JIBS, Business Administration
Business Administration

Search outside of DiVA

GoogleGoogle Scholar

urn-nbn

Altmetric score

urn-nbn
Total: 206 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf