Please use this identifier to cite or link to this item:
Title: Looking into the expectation gap - what are going-concern assumptions really about?
Authors: Isaac Mazaba, CA
Lotter, Willem Adriaan
Thurner, Thomas Wolfgang
Keywords: Audit;Risk;Stock Exchange;Finance
Issue Date: 2013
Publisher: Virtue enterprise
Abstract: The question of whether or not a company will be able to continue to do business is at the core of every audit. Despite the importance of this part of the audit, little is known about what triggers an auditor to issue a qualified opinion based on going-concern uncertainties. Previous research has suggested that the auditor might act strategically, using, e.g., ambiguous wording to avoid a qualification and negative consequences for the client and still communicate his concerns. Yet these studies failed to explain in what instances auditors use such strategies. We use a sample of 90 companies that were delisted from the Johannesburg Stock Exchange or received a qualified opinion, and show that the issuance of a qualified opinion is not correlated with the company’s financial situation at all. We therefore suggest that the auditor’s own risk assessment— whether or not he might risk a lawsuit if a due going-concern assumption is not issued—might explain much more about his decision than do specifics about the client company.
Appears in Collections:BUS - Journal Articles (DHET subsidised)

Files in This Item:
File Description SizeFormat 
Isaac Mazaba_CA_Lotter_Willem Adriaan_Thurner_Thomas Wolfgang_A mini review_pdfMain article1.24 MBAdobe PDFView/Open
Show full item record

Page view(s)

Last Week
Last month
checked on Feb 9, 2021


checked on Feb 9, 2021

Google ScholarTM


This item is licensed under a Creative Commons License Creative Commons