Investor reaction to going concern audit reports

Accounting Review

Volumn 85, Issue 6, 2010, Pages 2075-2105

  Menon, Krishnagopal ^a   Williams, David D ^b  

^a BOSTON UNIVERSITY   (United States)

^b OHIO STATE UNIVERSITY   (United States)

Author keywords

Audit reports; Debt covenants; Going concern; Institutional ownership

Indexed keywords

EID: 78650639445     PISSN: 00014826     EISSN: None     Source Type: Journal    
DOI: 10.2308/accr.2010.85.6.2075     Document Type: Review

References (38)

1. Alford, A., J. Jones, and M. Zmijewski. 1994. Extension and violation of the statutory SEC form 10-K filing requirements. Journal of Accounting and Economics 17 (January): 229-254.
2. Altman, E. I. 1968. Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. The Journal of Finance 23 (September): 589-609.
3. American Institute of Certified Public Accountants (AICPA). 1988. The Auditor's Consideration of an Entity's Ability to Continue as a Going Concern. Statement on Auditing Standards No. 59. New York, NY: AICPA.
4. Banz, R. W. 1981. The relationship between return and market value of common stocks. Journal of Financial Economics 9 (March): 3-18.
5. Barth, M. E., W. H. Beaver, and W. R. Landsman. 1998. Relative valuation roles of equity book value and net income as a function of financial health. Journal of Accounting and Economics 25 (February): 1-34.
6. Bellovary, J. L., D. E. Giacomino, and M. D. Akers. 2006. Weighing the public interest: Is the going concern opinion still relevant? The CPA Journal 76 (January): 16-21.
7. Belsley, D. A., E. Kuh, and R. E. Welsch. 1980. Regression Diagnostics. New York, NY: John Wiley.
8. Beneish, M. D., and E. Press. 1993. Costs of technical violation of accounting-based debt covenants. The Accounting Review 68 (April): 233-257.
9. -, and-. 1995. The resolution of technical default. The Accounting Review 70 (April): 337-353.
10. Berger, P. G., E. Ofek, and I. Swary. 1996. Investor evaluation of the abandonment option. Journal of Financial Economics 42 (October): 257-287.
11. Blay, A. D., and M. A. Geiger. 2001. Market expectations for first-time going concern recipients. Journal of Accounting, Auditing & Finance 16 (Summer): 209-226.
12. Business Recorder. 2002. Standard & Poor's Cuts Gentek's Corporate Credit Rating. (March 30).
13. Carrns, A. 2000. Charting one internet patient's rapid decline. Wall Street Journal (April 6): B1.
14. Chen, K. C. W., and B. K. Church. 1996. Going concern opinions and the market's reaction to bankruptcy filings. The Accounting Review 71 (January): 117-128.
15. Collins, D. W., M. Pincus, and H. Xie. 1999. Equity valuation and negative earnings: The role of book value of equity. The Accounting Review 74 (January): 29-61.
16. Dodd, P., N. Dopuch, R. Holthausen, and R. Leftwich. 1984. Qualified audit opinions and stock prices. Journal of Accounting and Economics 6 (April): 3-38.
17. Dopuch, N., R. Holthausen, and R. Leftwich. 1986. Abnormal stock returns associated with media disclosures of "subject to" qualified audit opinions. Journal of Accounting and Economics 8 (June): 93-117.
18. Ellingsen, J. E., K. Pany, and P. Fagan. 1989. SAS No. 59: How to evaluate going concern. Journal of Accountancy 165 (January): 24-31.
19. Elliott, J. A. 1982. "Subject to" audit opinions and abnormal security returns-Outcomes and ambiguities. Journal of Accounting Research 20 (Autumn): 617-638.
20. Fleak, S. K., and E. R. Wilson. 1994. The incremental information content of the going-concern audit opinion. Journal of Accounting, Auditing & Finance 9 (Winter): 149-166.
21. Geiger, M. A., and D. Rama. 2006. Audit firm size and going-concern reporting accuracy. Accounting Horizons 20 (March): 1-17.
22. Herbohn, K., V. Ragunathan, and R. Garsden. 2007. The horse has bolted: Revisiting the market reaction to going concern modifications of audit reports. Accounting and Finance 47 (September): 473-493.
23. Hillegeist, S. A., E. K. Keating, D. P. Cram, and K. G. Lundstedt. 2004. Assessing the probability of bankruptcy. Review of Accounting Studies 9 (March): 5-34.
24. Holder-Webb, L. M., and M. S. Wilkins. 2000. The incremental information content of SAS No. 59 goingconcern opinions. Journal of Accounting Research 38 (Spring): 209-219.
25. Hopwood, W., J. McKeown, and J. Mutchler. 1989. A test of the incremental explanatory power of opinions qualified for consistency and uncertainty. The Accounting Review 64 (January): 28-48.
26. Jones, F. L. 1996. The information content of the auditor's going concern evaluation. Journal of Accounting and Public Policy 15 (Spring): 1-27.
27. Kausar, A., R. J. Taffler, and C. Tan. 2006. Anomalous price reaction and differential stockholder response to going-concern audit opinions and withdrawals. Available at SSRN: http://ssrn.com/abstract=889282.
28. -, -, and -. 2009. The going-concern market anomaly. Journal of Accounting Research 47 (March): 212-239.
29. Landler, M. 2004. For Spiegel investor, a hard lesson in securities law. The New York Times (September 11): C1.
30. Louwers, T. J., F. M. Messina, and M. D. Richard. 1999. The auditor's going-concern disclosure as a self-fulfilling prophecy: A discrete-time survival analysis. Decision Sciences 30 (Summer): 805-824.
31. Mutchler, J. F. 1984. Auditor's perceptions of the going-concern opinion decision. Auditing: A Journal of Practice & Theory 3 (Spring): 17-30.
32. Norris, F. 2003. KPMG faulted on handling of Polaroid financial reports. The New York Times (August 23): C1, C3.
33. Ogneva, M., and K. R. Subramanyam. 2007. Does the stock market under-react to going concern opinions? The evidence from the U. S. and Australia. Journal of Accounting and Economics 43 (July): 439-452.
34. Skinner, D. 1994. Why firms voluntarily disclose bad news. Journal of Accounting Research 32 (Spring): 38-60.
35. Taffler, R. J., J. Lu, and A. Kausar. 2004. In denial? Stock market under-reaction to going-concern audit report disclosures. Journal of Accounting and Economics 38 (December): 263-296.
36. Utama, S., and W. M. Cready. 1997. Institutional ownership, differential predisclosure precision and trading volume at announcement dates. Journal of Accounting and Economics 24 (December): 129-150.
37. Walther, B. 1997. Investor sophistication and market earnings estimates. Journal of Accounting Research 35 (Autumn): 157-179. (Pubitemid 127349161)
38. Zmijewski, M. E. 1984. Methodological issues related to the estimation of financial distress prediction models. Journal of Accounting Research 22 (Supplement): 59-82.