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The Audit Quality and the Cessation of the Activity of the Companies

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  • Marco Maggiorani

Abstract

The purpose of this study is to examine and test the relationship between audit quality and cessation of business by non-financial, non-listed companies operating under IAS.A logistic regression model is used to test the hypotheses based on the modified Jones model and some other variable. The results obtained considering abnormal accrual values indicate that there is no correlation between corporate termination and some of the variables studied, abnormal accrual and non-monetary accrual. On the other hand, it is statistically significant when considering working capital. By understanding whether there is a relationship between audit quality and cessation of activity, it is possible to ascertain which variables to investigate in order to ensure that such events are reduced, all the more so if there are possible earning management practices. The originality of the article lies in the analysis of the relationship between audit quality and the cessation of companies, giving new point of view to the topic.

Suggested Citation

  • Marco Maggiorani, 2023. "The Audit Quality and the Cessation of the Activity of the Companies," International Journal of Business and Management, Canadian Center of Science and Education, vol. 18(1), pages 108-108, February.
    • Handle: RePEc:ibn:ijbmjn:v:18:y:2023:i:1:p:108
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    References listed on IDEAS

    as
    1. Jean H. Bédard & Nathalie Gonthier-Besacier & Alain Schatt, 2019. "Consequences of Expanded Audit Reports : Evidence from the Justifications of Assessments in France," Post-Print hal-02011144, HAL.
    2. repec:eme:maj000:02686900710772591 is not listed on IDEAS
    3. Shireenjit Johl & Christine A. Jubb & Keith A. Houghton, 2007. "Earnings management and the audit opinion: evidence from Malaysia," Managerial Auditing Journal, Emerald Group Publishing, vol. 22(7), pages 688-715, July.
    4. Cédric Lesage & Nicole V. S. Ratzinger-Sakel & Jaana Kettunen, 2017. "Consequences of the Abandonment of Mandatory Joint Audit: An Empirical Study of Audit Costs and Audit Quality Effects," European Accounting Review, Taylor & Francis Journals, vol. 26(2), pages 311-339, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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