Impact of Specific Market Predictors on Audit Opinion of Listed Negative Book Equity Firms in Nigeria

Umar Farouk Abdulkarim and Adedeji Daniel Gbadebo

Journal of Business and Social Review in Emerging Economies, 2025, vol. 11, issue 4, 457-468

Abstract: Purpose: This research paper focus has investigated the effect of certain market-based predictors on the audit opinion of equity firms. The study attempted to establish the nature of significant financial indicators on the audit risk of firms to obtain unqualified or going-concern-related audit opinions.Design/Methodology/Approach: A correlational research design was used as a population of 33 listed firms that reported negative book equity within the study period was used. An adjusted sample of 19 complete data-filled firms was obtained with the help of a census sampling method that employed a filtration strategy.Findings: The outcome showed that the probability of getting a going-concern modification, as compared to an unqualified audit opinion, depends greatly on the Earnings Per Share. The firms, which have higher earnings performance, have lower chances to have a going-concern-related. The effect of Book Value Per Share on the probability of either receiving non going-concern or going-concern modification was positive but not significant.Implications/Originality/Value: The paper emphasizes the need to enhance financial performance, especially Earnings Per Share and Book Value Per Share to reduce the risk of going-concern modifications. It suggests that management of book equity firms should take proactive steps to tackle the issues that impact on BVPS including high leverage or decreasing profitability.

Keywords: Audit opinion; BVPS; EPS; Polytomous logistic regression; NBE firms (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:src:jbsree:v:11:y:2025:i:4:p:457-468

DOI: 10.26710/jbsee.v11i4.3613

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