IDEAS home Printed from https://ideas.repec.org/a/ers/journl/vxxy2017i3ap209-230.html
   My bibliography  Save this article

Consequences of Going Concern Opinion for Firms and Capital Market with Accounting Firm Size as Moderation Variable

Author

Listed:
  • Dody Hapsoro

Abstract

This research aims to observe the consequences of going concern opinion (GCO) and examine the role of specialist accounting firms for the financial reports of business firms and capital markets. The research is based on an experimental study consisting of 107 undergraduate and graduate students who were asked to act as financial analysts.The GCO consequence for the financial reports of business firms is that the stock price of the corresponding firms will decline, but the decline will be smaller if the financial reports are audited by specialist accounting firms. The GCO consequence for rival firms is that the stock prices of the rival firms will rise if other companies in the same industry receive GCO, but the increase will be smaller if the companies receiving GCO are audited by specialized accounting firms.The GCO consequences of the capital markets is that the stock prices of all companies, the composite index and the market participants will increase, but the presence of a specialized accounting firm has not been proven to strengthen the market participants' willingness to participate further in the stock market.

Suggested Citation

  • Dody Hapsoro, 2017. "Consequences of Going Concern Opinion for Firms and Capital Market with Accounting Firm Size as Moderation Variable," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 209-230.
    • Handle: RePEc:ers:journl:v:xx:y:2017:i:3a:p:209-230
    as

    Download full text from publisher

    File URL: http://ersj.eu/dmdocuments/2017-xx-3-a-14.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. N.N. Kosinova & M.S. Tolstel & S.P. Sazonov & K.D. Vaysbeyn, 2016. "Development of Methodological Approach to Enterprise’s Financial Strategy Based on Comprehensive Evaluation of Its Strategic Potential," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 21-33.
    2. Nikolaos Theriou & Vassilis Aggelidis, 2014. "Management Accounting Systems, Top Management Team’s Risk Characteristics and Their Effect on Strategic Change," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 3-38.
    3. Linda Myers & Jaime Schmidt & Michael Wilkins, 2014. "An investigation of recent changes in going concern reporting decisions among Big N and non-Big N auditors," Review of Quantitative Finance and Accounting, Springer, vol. 43(1), pages 155-172, July.
    4. Luís M. S. Coelho & Rúben M. T. Peixinho & Siri Terjensen, 2012. "Going concern opinions are not bad news: Evidence from industry rivals," Working Papers Department of Economics 2012/16, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    5. R. Elliott & Michael Highfield & Mark Schaub, 2006. "Contagion or Competition: Going Concern Audit Opinions for Real Estate Firms," The Journal of Real Estate Finance and Economics, Springer, vol. 32(4), pages 435-448, June.
    6. DeAngelo, Linda Elizabeth, 1981. "Auditor size and audit quality," Journal of Accounting and Economics, Elsevier, vol. 3(3), pages 183-199, December.
    7. N.G. Vovchenko & M.G. Holina & A.S. Orobinskiy & R.A. Sichev, 2017. "Ensuring Financial Stability of Companies on the Basis of International Experience in Construction of Risks Maps, Internal Control and Audit," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 350-368.
    8. O.I Averin & N.F. Kolesnik & L.M. Makarova, 2016. "The Integration of the Accounting System for Implementing World Class Manufacturing (WCM) Principles," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 53-69.
    9. I.D. Anikina & A.V. Gukova & Ð .Ð . Golodova & Ð .Ð . Chekalkina, 2016. "Methodological Aspects of Prioritization of Financial Tools for Stimulation of Innovative Activities," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 100-112.
    10. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    11. Nikolaos Theriou & Vassilis Aggelidis & Georgios Theriou, 2014. "The Mediating Effect of the Knowledge Management Process to the Firm’s Performance: A Resource-Based View," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 87-114.
    12. Mark Schaub, 2006. "Investor overreaction to going concern audit opinion announcements," Applied Financial Economics, Taylor & Francis Journals, vol. 16(16), pages 1163-1170.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dody Hapsoro & Tulus Suryanto, 2017. "Consequences of Going Concern Opinion for Financial Reports of Business Firms and Capital Markets with Auditor Reputation as a Moderation Variable - An Experimental Study," European Research Studies Journal, European Research Studies Journal, vol. 0(2A), pages 197-223.
    2. Anatoliy Ivanovich Belousov & Galina Vasilevna Mikhailova & Fatima Magamedovna Uzdenova & Viktoria Georgievna Blokhina, 2017. "Accounting Engineering Tools in the Research of Economic Costs and Benefits," European Research Studies Journal, European Research Studies Journal, vol. 0(3B), pages 13-21.
    3. Eva Maria Lado Gonzalez & Domingo Calvo Dopico, 2017. "The Importance of Intangible Assets in the Strategic Management of the Firm: An Empirical Application for Banco Santander," European Research Studies Journal, European Research Studies Journal, vol. 0(2A), pages 177-196.
    4. Wahyu Agus Winarno & Bambang Tjahjadi, 2017. "The Moderating Effect of Industry Environments on the Relationship between IT Asset Portfolios, Efficiency and Innovation in the ERP Context," European Research Studies Journal, European Research Studies Journal, vol. 0(2A), pages 3-15.
    5. Kamil R. Bibarsov & Natalia V. Kretova & Elena Yu. Popova, 2017. "Improvement of Innovative Forms as a Tool for Effective Development of Small Business," European Research Studies Journal, European Research Studies Journal, vol. 0(2B), pages 98-110.
    6. Andy Lardon & Marc Deloof, 2014. "Financial disclosure by SMEs listed on a semi-regulated market: evidence from the Euronext Free Market," Small Business Economics, Springer, vol. 42(2), pages 361-385, February.
    7. Nikolay Tikhomirov & Tatiana Tikhomirova & Eldar Khamitov & Vladimir Ponomarev, 2017. "Models of Assessment of the Influnce of Insurance Assets Securitization on Stability of Mutual Insurance Societies," European Research Studies Journal, European Research Studies Journal, vol. 0(2B), pages 321-333.
    8. John M. Barrios, 2022. "Occupational Licensing and Accountant Quality: Evidence from the 150‐Hour Rule," Journal of Accounting Research, Wiley Blackwell, vol. 60(1), pages 3-43, March.
    9. Carlin Dowling & W. Robert Knechel & Robyn Moroney, 2018. "Public Oversight of Audit Firms: The Slippery Slope of Enforcing Regulation," Abacus, Accounting Foundation, University of Sydney, vol. 54(3), pages 353-380, September.
    10. Rajib Doogar & Padmakumar Sivadasan & Ira Solomon, 2010. "The Regulation of Public Company Auditing: Evidence from the Transition to AS5," Journal of Accounting Research, Wiley Blackwell, vol. 48(4), pages 795-814, September.
    11. Limei Che & Ole-Kristian Hope & John Christian Langli, 2020. "How Big-4 Firms Improve Audit Quality," Management Science, INFORMS, vol. 66(10), pages 4552-4572, October.
    12. Hasyim & Sahyar & Mahmud, 2017. "Isolating Mechanism as a Mean to Improve Performance of SMEs," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 594-612.
    13. Gu, Yiquan, 2008. "Imperfect Certification," Ruhr Economic Papers 78, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    14. Nikolay Tikhonovich Labyntsev & Elena Aleksandrovna Sharovatova & Irina Aleksandrovna Omelchenko & Tatyana Valeryevna Makarenko, 2017. "Tendencies of Standardisation of Management Accounting in Russian and International Practices," European Research Studies Journal, European Research Studies Journal, vol. 0(3B), pages 45-60.
    15. Henderson, James & Leleux, Benoit & White, Ian, 2006. "Service-for-equity arrangements: Untangling motives and conflicts," Journal of Business Venturing, Elsevier, vol. 21(6), pages 886-909, November.
    16. Breuer, Matthias & Le, Anthony & Vetter, Felix, 2023. "Audit mandates, audit firms, and auditors," Working Papers 333, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    17. Sergey Mikhailovich Vasin & Leyla Ayvarovna Gamidullaeva & Tamara Kerimovna Rostovskaya, 2017. "The Challenge of Social Innovation: Approaches and Key Mechanisms of Development," European Research Studies Journal, European Research Studies Journal, vol. 0(2B), pages 25-45.
    18. Conheady, Brian & McIlkenny, Philip & Opong, Kwaku K. & Pignatel, Isabelle, 2015. "Board effectiveness and firm performance of Canadian listed firms," The British Accounting Review, Elsevier, vol. 47(3), pages 290-303.
    19. Albekov Adam Umarovich & Vovchenko Natalia Gennadyevna & Andreeva Olga Vladimirovna & Sichev Roman Alexandrovich, 2017. "Block Chain and Financial Controlling in the System of Technological Provision of Large Corporations," European Research Studies Journal, European Research Studies Journal, vol. 0(3B), pages 3-12.
    20. Atanasko Atanasovski, 2015. "Empirical Investigation into the Determinants of Compliance with IFRS 7 Disclosure Requirements," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(2), pages 5-17, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:xx:y:2017:i:3a:p:209-230. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ersj.eu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.