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- Title
Auditors' going-concern-modified opinions after 2001: measuring reporting accuracy.
- Authors
Carey, Peter; Kortum, Stuart; Moroney, Robyn
- Abstract
An important change in auditors' reporting behaviour in the period after the high-profile corporate collapses in 2001 is that auditors were more likely to issue going-concern (GC)-modified audit opinions. Comparing company failure rates subsequent to receiving a first-time going-concern (FTGC)-modified audit opinion in the pre- and post-2001 periods, we find a consistent type 1 error (misclassification) rate (the rate of survival among companies issued an FTGC opinion). Results are indicative of auditors maintaining GC reporting accuracy when comparing the 1995-1996 and 2004-2005 periods. This conclusion is supported after considering the impact of mitigating circumstances surrounding companies that received an FTGC-modified audit report and survived.
- Subjects
AUDITORS; GOING concern (Accounting); AUDITORS' reports; CORPORATION reports; BUSINESS failures; BANKRUPTCY; ACCOUNTING; ACCURACY of information
- Publication
Accounting & Finance, 2012, Vol 52, Issue 4, p1041
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/j.1467-629X.2011.00436.x