International Business Management
ISSN: OnlineISSN: Print 1993-5250
Abstract
The study is an empirical investigation in the relationship between Going Concern modified Opinion (GCO) and subsequent insolvency of listed companies in Italy during the period 2008-2012. Prior studies showed that companies which have already received a qualified GCO are more likely than others to receive a repeat qualified GCO within a year. Particular attention was devoted to the relationship between GC emphasis of matter in auditor’s opinion, qualified GCO and subsequent insolvency. Two major findings are highlighted. First, the GC uncertainty reported in a GC emphasis of matter 1 year, tends to increase or persist in the subsequent year. Secondly, there is a higher probability of insolvency when a company has received a qualified GCO in the previous year rather than an unqualified opinion with GC emphasis of matter. These results may be a measure of auditing accuracy in auditor’s reports.
How to cite this article:
Fabrizio Bava, Melchior Gromis di Trana and Pietro Pisoni. Going Concern Emphasis of Matter and Accuracy of Audit Opinion: Italian Evidence.
DOI: https://doi.org/10.36478/ibm.2018.292.298
URL: https://www.makhillpublications.co/view-article/1993-5250/ibm.2018.292.298