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Auditors' going-concern-modified opinions after 2011 : measuring reporting accuracy
journal contribution
posted on 2012-12-01, 00:00 authored by Peter CareyPeter Carey, S Kortum, R MoroneyAn important change in auditors’ reporting behaviour in the period after the high-profile corporate collapses in 2001 is that auditors were more likely to issue going-concern (GC)-modified audit opinions. Comparing company failure rates subsequent to receiving a first-time going-concern (FTGC)-modified audit opinion in the pre- and post-2001 periods, we find a consistent type 1 error (misclassification) rate (the rate of survival among companies issued an FTGC opinion). Results are indicative of auditors maintaining GC reporting accuracy when comparing the 1995–1996 and 2004–2005 periods. This conclusion is supported after considering the impact of mitigating circumstances surrounding companies that received an FTGC-modified audit report and survived.
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Journal
Accounting and financeVolume
52Issue
4Pagination
1041 - 1059Publisher
AFAANZLocation
Richmond, Vic.ISSN
0810-5391eISSN
1467-629XLanguage
engPublication classification
C1 Refereed article in a scholarly journal; C Journal articleCopyright notice
2012, AFAANZUsage metrics
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