Please use this identifier to cite or link to this item: http://hdl.handle.net/20.500.11861/10511
Title: The effect of tenure, specialization, conservatism, and fees on the relationship between going-concern opinions and client bankruptcy
Authors: Dr. LAI Kam Wah 
Issue Date: 2023
Source: Accounting and the Public Interest, 2023, vol. 23(1), pp. 146-173.
Journal: Accounting and the Public Interest 
Abstract: This paper uses the relationship between a going-concern modified audit opinion and client bankruptcy as an audit quality indicator to investigate factors that could affect audit quality. The setting is important because, although stakeholders often view bankruptcies without a preceding going-concern opinion as evidence of impaired auditor independence, there could be various reasons behind them. Using a matched sample of bankrupt and nonbankrupt clients, this paper finds that the relationship is less positive when auditors are nonspecialists, allow more income-increasing discretionary accruals, or receive higher audit fees. These results suggest that auditors provide lower audit quality when they lack sufficient industry knowledge, are less conservative, or are more reliant on audit fees.
Type: Peer Reviewed Journal Article
URI: http://hdl.handle.net/20.500.11861/10511
ISSN: 1530-9320
DOI: https://doi.org/10.2308/API-2022-005
Appears in Collections:Accounting - Publication

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