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Effect Of Non-Audit Services Provision On The Relationship Between Going Concern Issue Emphasis And Earnings Management

Author

Listed:
  • Ivica Filipovic

    (University of Split)

  • Toni Susak

    (University of Split)

  • Barbara Krvavac

    (BDO Croatia d. o. o.)

Abstract

Provision of non-audit services is often highlighted in the context of potential threat to auditor's independence, which may have repercussions on independent auditor's report. The aim of this research is to determine the impact of earnings management on going concern issue emphasis in independent auditor's report while taking into account the moderating effect of non-audit services provision by an auditor. Level of earnings management was estimated using the value of discretionary accruals calculated using the Modified Jones model. Research sample included 93 non-financial companies listed on the stock exchange in the Republic of Croatia for the period from 2014 to 2018. Collected data were analysed using logistic regression for panel data. Based on the results of the research, it can be concluded that the provision of non-audit services by an audit company does not have a statistically significant impact both on the relationship between earnings management and the emphasis of the going concern issue in independent auditor's report.

Suggested Citation

  • Ivica Filipovic & Toni Susak & Barbara Krvavac, 2020. "Effect Of Non-Audit Services Provision On The Relationship Between Going Concern Issue Emphasis And Earnings Management," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 29(2), pages 393-408, december.
    • Handle: RePEc:avo:emipdu:v:29:y:2020:i:2:p:393-408
    DOI: 10.17818/EMIP/2020/2.4
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    More about this item

    Keywords

    earnings management; going concern assumption; independent auditor's report; auditor’s independence; non-audit services;
    All these keywords.

    JEL classification:

    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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