Changes in the audit environment and auditors' propensity to issue going-concern opinions

Auditing

Volumn 27, Issue 2, 2008, Pages 55-77

  Fargher, Neil L ^a   Jiang, Liwei ^b  

^a AUSTRALIAN NATIONAL UNIVERSITY   (Australia)

^b MACQUARIE UNIVERSITY   (Australia)

Author keywords

Audit environment; Audit quality; Going concern modifications

Indexed keywords

EID: 77249087618     PISSN: 02780380     EISSN: 15587991     Source Type: Journal    
DOI: 10.2308/aud.2008.27.2.55     Document Type: Article

References (43)

1. Altman, E. I. 1968. Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. The Journal of Finance 23 September: 589-609.
2. Australian Stock Exchange ASX. 2003. Principles of Good Governance and Best Practice Recommendations. ASX Corporate Governance Council, March 2003. Sydney, NSW: ASX Limited
3. Bedard, J. C., and K. M. Johnstone. 2005. Longitudinal comparison of auditors' response to client risk in the Sarbanes-Oxley era. Working paper, Bentley College.
4. Bessell, M., A. Anandarajan, and A. Umar. 2003. Information content, audit reports and going concern: An Australian study. Accounting and Finance 43 November: 261-282.
5. Carey, P., and R. Simnett. 2006. Audit partner tenure and audit quality. The Accounting Review 81 March: 677-712.
6. Carey, P., and R. Simnett, S. Kortum, and R. Moroney. 2007. Auditors' going-concern modified opinions post 2001: Increased conservatism or improved accuracy. Working paper, Monash University.
7. Carson, E., A. Ferguson, and R. Simnett. 2006. Australian audit reports: 1996-2003. Australian Accounting Review 16 December: 89-96.
8. Chen, Y. M., R. Moroney, and K. Houghton. 2005. Audit committee composition and the use of an industry specialist audit firm. Accounting and Finance 45 July: 217-239.
9. Commonwealth of Australia. 2002. Corporate Disclosure: Strengthening the Financial Reporting Frame- work. Canberra, ACT: Australian Government Publishing Service.
10. Commonwealth of Australia. 2004. Corporate Law Economic Reform Program. Audit Reform and Corporate Disclosure CLERP 9
11. Commonwealth of Australia Bill 2003 July 1, 2004. Canberra, ACT: Australian Government Publishing Service.
12. CPA Australia and The Institute of Chartered Accountants in Australia ICAA. 2002. The Audit Report on a General Purpose Financial Report. Auditing and Assurance Standards AUS702. Melbourne, Victoria: CPA Australia.
13. Craswell, A. 1999. Does the provision of nonaudit services impair auditor independence? Journal of Inter- national Auditing 3: 29-40.
14. Craswell, A, D. Stokes, and J. Laughton. 2002. Auditor independence and fee dependence. Journal of Accounting and Economics 33 June: 253-275.
15. DeAngelo, L. E. 1981. Auditor size and audit quality. Journal of Accounting and Economics 3 August: 183-199.
16. DeFond, M., K. Ragunandan, and K. R. Subramanyam. 2002. Do nonaudit service fees impair auditor independence? Evidence from going-concern audit opinions. Journal of Accounting Research 40 September: 1247-1274.
17. Dopuch, N., R. Holthausen, and R. Leftwich. 1987. Predicting audit modifications with financial and market variables. The Accounting Review 62 July: 431-454.
18. Firth, M. 2002. Auditor-provided consultancy services and their associations with audit fees and audit opinions. Journal of Business Finance & Accounting 29 June-July: 661-693.
19. Francis, J. R., and J. Krishnan. 1999. Accounting accruals and auditor reporting conservatism. Contemporary Accounting Research 16 Spring: 135-165.
20. Francis, J. R., and J. Krishnan. 2002. Evidence on auditor risk-management strategies before and after The Private Securities Litigation Reform Act of 1995. Asia-Pacific Journal of Accounting and Economics 9: 135-157
21. Frost, C. 1994. Uncertainty-modified audit reports and future earnings. Auditing: A Journal of Practice & Theory 13 Spring: 22-35.
22. Geiger, M., and K. Raghunandan. 2002. Going-concern opinions in the "new" legal environment. Accounting Horizons 16 March: 17-26.
23. Geiger, M, and D. Rama. 2003. Audit fees, nonaudit fees, and auditor reporting on stressed companies. Auditing: A Journal of Practice & Theory 22 September: 53-69.
24. Geiger, M, K. Raghunandan, and D. Rama. 2005. Recent changes in the association between bankruptcies and prior audit opinions. Auditing: A Journal of Practice & Theory 24 May: 21-35.
25. Joint Committee of Public Accounts and Audit JCPAA. 2002. Review of Independent Auditing by Registered Company Auditors, September. Canberra, ACT: Parliament of Australia.
26. Jones, S., and D. A. Hensher. 2004. Predicting firm financial distress: A mixed logit model. The Accounting Review 79 October: 1011-1038.
27. Judge, G. G., R. C. Hill, W. E. Griffiths, H. Lutkepohl, and T. C. Lee. 1988. Introduction to the Theory and Practice of Econometrics. 2nd edition, New York, NY: Wiley.
28. Krishnan, J., and J. Krishnan. 1996. The role of economic trade-offs in the audit opinion decision: an empirical analysis. Journal of Accounting, Auditing & Finance 11 Fall: 565-586.
29. Levitan, A. S., and J. A. Knoblett. 1985. Indicators of exceptions to the going-concern assumption. Auditing: A Journal of Practice & Theory 5 Fall: 26-39.
30. McKeown, J. C., J. F. Mutchler, and W. Hopwood. 1991. Toward an explanation of auditor failure to modify the audit opinions of bankrupt companies. Auditing: A Journal of Practice & Theory Supplement: 1-13.
31. Monroe, G., and S. The. 1993. Predicting uncertainty audit modifications in Australia using publicly available information. Accounting and Finance 33 November: 79-106.
32. Mutchler, J. F. 1985. A multivariate analysis of the auditor's going-concern opinion decision. Journal of Accounting Research 23 Autumn: 668-682.
33. Mutchler, J. F. 1986. Empirical evidence regarding the auditor's going-concern opinion decision. Auditing: A Journal of Practice & Theory 6 Fall: 148-163.
34. Mutchler, J. F, W. Hopwood, and J. M. McKeown. 1997. The influence of contrary information and mitigating factors on audit opinion decisions on bankrupt companies. Journal of Accounting Research 35 Autumn: 295-310.
35. Nogler, G. E. 1995. The resolution of auditor going-concern opinions. Auditing: A Journal of Practice & Theory 14 Fall: 54-73.
36. Palmrose, Z-V. 1986. The effect of nonaudit services on the pricing of audit services: Further evidence. Journal of Accounting Research 24 Autumn: 405-411.
37. Poirier, D. J. 1980. Partial observability in bivariate probit models. Journal of Econometrics 12 February:209-217.
38. Raghunandan, K., and D. V. Rama. 1995. Audit opinions for companies in financial distress: Before and after SAS No. 59. Auditing: A Journal of Practice & Theory 14 Spring: 50-63.
39. Ramsay, I. 2001. Independence of Australian Company Auditors. Parkes, ACT: Commonwealth of Australia
40. Scholes, M., and J. Williams. 1977. Estimating betas from nonsynchronous data. Journal of Financial Economics 5 December: 309-327.
41. Sercu, P., H. V. Bauwhede, and M. Willekens. 2006. Post-Enron implicit audit reporting standards: Sifting through the evidence. De Economist 154 September: 389-403.
42. Simunic, D. 1984. Auditing, consulting, and auditor independence. Journal of Accounting Research 22 Autumn: 679-702.
43. U.S. House of Representatives. 2002. Sarbanes-Oxley Act. Public Law No. 107-204. Washington, D.C.: Government Printing Office