Audit modifications in emerging markets: The Macedonian Stock Exchange

Dusica Stevcevska-Srbinoska

Romanian Journal of Economics, 2022, vol. 55, issue 2(64), 43-69

Abstract: As a vital external governance mechanism, the audit report transmits important information about the entityb s performance and reporting quality. Benefiting from a novel dataset, this study is the first paper to evaluate audit report modifications in North Macedoniab s emerging economy.Using a sample of 99 nonfinancial listed entities for 2014b 2017, we detect that profitability, leverage and report timeliness are significantly associated with audit modifications. Opinions depict a deteriorating trend, whereby qualifications are principally attributable to disagreements with auditee management.Regulators could further focus on the precision in defining audit materiality, especially in reports with multiple qualifications yet lacking negative opinion.

Keywords: audit opinion; audit qualifications; audit modifications; financial indicators; Macedonian Stock Exchange (search for similar items in EconPapers)
JEL-codes: M42 P41 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ine:journl:v:55:y:2022:i:64:p:43-69

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