The Audit Quality and the Cessation of the Activity of the Companies

Marco Maggiorani

International Journal of Business and Management, 2023, vol. 18, issue 1, 108

Abstract: The purpose of this study is to examine and test the relationship between audit quality and cessation of business by non-financial, non-listed companies operating under IAS.A logistic regression model is used to test the hypotheses based on the modified Jones model and some other variable. The results obtained considering abnormal accrual values indicate that there is no correlation between corporate termination and some of the variables studied, abnormal accrual and non-monetary accrual. On the other hand, it is statistically significant when considering working capital. By understanding whether there is a relationship between audit quality and cessation of activity, it is possible to ascertain which variables to investigate in order to ensure that such events are reduced, all the more so if there are possible earning management practices. The originality of the article lies in the analysis of the relationship between audit quality and the cessation of companies, giving new point of view to the topic.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijbmjn:v:18:y:2023:i:1:p:108

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