Consequences of Going Concern Opinion for Financial Reports of Business Firms and Capital Markets with Auditor Reputation as a Moderation Variable - An Experimental Study

Dody Hapsoro and Tulus Suryanto

European Research Studies Journal, 2017, vol. XX, issue 2A, 197-223

Abstract: This research aims to observe the consequences of going concern opinion (GCO) and examine the role of specialist accounting firms for the financial reports of business firms and capital markets. The research is based on an experimental study consisting of 107 undergraduate and graduate students who were asked to act as financial analysts.The GCO consequence for the financial reports of business firms is that the stock price of the corresponding firms will decline, but the decline will be smaller if the financial reports are audited by specialist accounting firms. The GCO consequence for rival firms is that the stock prices of the rival firms will rise if other companies in the same industry receive GCO, but the increase will be smaller if the companies receiving GCO are audited by specialized accounting firms.The GCO consequences of the capital markets is that the stock prices of all companies, the composite index and the market participants will increase, but the presence of a specialized accounting firm has not been proven to strengthen the market participants’ willingness to participate further in the stock market.

Keywords: Going concern opinion (GCO); financial reports; specialized industry auditor; stock price of firms; composite index; market participants. (search for similar items in EconPapers)
JEL-codes: M41 M48 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

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Persistent link: https://EconPapers.repec.org/RePEc:ers:journl:v:xx:y:2017:i:2a:p:197-223

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