Evidence on Auditors Use of Business Continuity Models as an Analytical Procedure

Nirosh Karuppu

Accounting & Taxation, 2009, vol. 1, issue 1, 63-74

Abstract: Auditors expressing unqualified audit opinions and asserting going concern for companies that subsequently fail is regarded as audit failure and results in considerable disapproval of the auditing profession. Prior research has suggested that corporate failure models, as an analytical procedure, improve the accuracy of auditors’ assessments of going concern. This study utilizes a survey to examine the practical efficacy of such models within the audit decision framework. It is found that corporate failure models facilitate the formation of more appropriate going concern opinions and increase judgment consensus.

Keywords: Going concern opinions; audit judgment; corporate failure models (search for similar items in EconPapers)
JEL-codes: M41 M42 (search for similar items in EconPapers)
Date: 2009
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