The effect of financial condition, the failure of debt ratio, firm size and public accounting reputation on acceptance of going concern opinion

Lukman, Hendro and Adree Cipto Setiawan, Stevanus The effect of financial condition, the failure of debt ratio, firm size and public accounting reputation on acceptance of going concern opinion. Karya Ilmiah Dosen. ISSN 978-979-99365-7-8

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Abstract

The importance of audit reports relating to going concern is to provide early warning for shareholders and other users of financial statements to avoid errors in decision making. The purpose of this study was to analyze the effect of financial conditions, such as failure of debt, firm size and reputation of the public accounting firm of the admission going concern opinions The population of this study is a manufacturing company which listed on the Indonesia Stock Exchange (BEI) from 2007 to 2011. The method of data analysis using regression analysis based on panel data The variables of financial condition and debt default are based on the assumption that Going Concern Opinion (GCO) is given only when the company has experience in financial distress. The size of the company, then, is used as variable due to the reason that the bigger the company, the easier it is to overcome the financial distress as it has stronger board of management. Therefore, the possibility to accept GCO less compare to the smaller company. Public Accouning Firms keep their reputation by giving opinion according to the auditing result even when they have financial distress. The results showed that the financial condition of all significant variables, all three have variables are significance that the level are less than 5%. Financial ratios reflect the company's ability to complete its obligations so that all three ratios may affect the likelihood of receiving GCO. While the other variables, including the failure of debt, company size and reputation of a public accounting firm, they were not significant becausethey have a greater significance level of 5%. This indicates that the auditor only concerned with financial factors will make a decision at the time of going concern opinion

Item Type: Article
Uncontrolled Keywords: Going Concern Opinion, firm size, reputation of accountant public, financial condition
Subjects: Karya Ilmiah Dosen > Fakultas Ekonomi
Divisions: Fakultas Ekonomi > Akuntansi
Fakultas Ekonomi > Manajemen
Depositing User: Ekonomi FE Tarumanagara
Date Deposited: 19 Jul 2017 19:16
Last Modified: 19 Jul 2017 19:16
URI: http://repository.untar.ac.id/id/eprint/1521

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