Going concern and audit opinion: studies on banking companies on the Indonesian stock exchange for the period 2003-2008
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Published:
Mar 30, 2022
Keywords:
Auditor's Opinion. Going Concern; Logistic Regressions; Bankruptcy Prediction Model; Z-Score Altman
Section
Articles
Statistics Article
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Abstract
The primary aim of this study is to investigate the usefulness of the bankruptcy prediction model for assessing going concern to help the auditor issue better going concern opinion. The model bankruptcy prediction firm for banking industry characteristic Model bankruptcy prediction proxed by three general financial ratios; capital ratios, risk financial ratios, and Z-score Altman ratio in Indonesia have been taken from the previous research of Bank Indonesia. The samples of this study are public commercial banks listed in JSX (Jakarta Stock Exchange) for the year 2003 to 2008. There are 114 samples which are collected by pooled data method and the samples are selected with purposive sampling method. Binary logistic regression SPSS version 15 tool used as aim for analyzing. The results show that capital ratios are effective for assessing going concern to predict the issuance of going concern opinion. Both univariate analysis and multivariate analysis show that 5 variables are significant. For the rest, financial risk ratios have 3 variables are significant and Z score Altman ratios have 1 variables are significant.
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How to Cite
estdwinanto, H. (2022). Going concern and audit opinion: studies on banking companies on the Indonesian stock exchange for the period 2003-2008 . Indonesia Auditing Research Journal, 11(1), 15–23. Retrieved from https://journals.iarn.or.id/index.php/ARJ/article/view/57
References
Altman, Edward I. 1968. Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. The journal of finance XXIII. (September): 589- 609.
American Institute of Public Accountants (AICPA). 1981. The auditor's considerations when a question aries about an entity's continued existence. Statement on auditing standards 34. (March).
American Institute of Public Accountants (AICPA). 1988. The auditor's consideration of an entity's ability to continue as a going concern. Statement on auditing standards 59. (April).
American Institute of Public Accountants (AICPA). 1981. The auditor's considerations when a question aries about an entity's continued existence. Statement on auditing standards 34. (March).
Arens, A Alvin, R J. Elder., and M S. Beasley. 2006. Auditing and assurance services an integrated approach. Pearson International Edition. 11th ed.
Back, Barbro., T. Laitinen., K. Sere., and M. Van Wezel. 1996. Choosing bankruptcy predictors using discriminant analysis, logit analysis, and generic algorithms. Turku center for computer science 40. (September).
Bank Indonesia. Directory of Bank Indonesia (2003-2007). Jakarta: Bank Indonesia.
Casterella, JR, BL Lewis, and PL Walker. 2000. Modeling the audit opinions issued to bankrupt companies: a two-stage empirical analysis. Decision sciences 31. (Spring): 507-530.
Chen, KCY, and BK Church. 1996. Going concern opinions and the market's reaction to bankruptcy fillings. The accounting review 71. (January): 117-128.
Fanny, M., and S. Saputra. 2005. Audit opiniongoing concern: a study based on the bankruptcy prediction model, company growth, and KAP reputation (studies on JSX issuers). National Symposium on Accounting 8. (September): 966-978.
Garson D. 2007. Log-Linear, Logit, and Probit Models.http://www2.chass.ncsu.edu/garson/pa765/logit.htm
Ghazali, Imam. 2001. Multivariate analysis application with SPSS. Publishing Board of Dipenogoro University, Semarang.
Hadad, MD, W. Santoso, and I. Rulina. 2003. Bankruptcy indicators in Indonesia: an additional early warning tools on financial system stability. Directorate of Banking Research and Regulation, Bank Indonesia. (December).
Hadad, MD, W. Santoso, and Sarwedi. 2004. Bankruptcy prediction model for commercial banks in Indonesia. Directorate of Bank Indonesia. (June). Banking Research and Regulation,
Hani., Cleary, and Mukhlasin. 2003. Going concern and audit opinion: a study of banking companies on the JSX. National Symposium on Accounting 6. (Surabaya).
Holder-Webb, LM, and MS Wilkins. 2000. The incremental information content of SAS no. 59 going concern opinions. Journal of accounting research 38. (Spring): 209-219.
opwood, W., J. McKeown, and J. Mutchler. 1989. A test of the incriminal explanatory power of opinions qualified for consistency and uncertainty. The account Hnting review LXIV. (January): 28-48.
Indonesian Accounting Association. 2001. Professional Standards for Public Accountants. Jakarta: Salemba Empat
Indonesian Accounting Association. 2001. Professional Standards for Public Accountants. Jakarta: Salemba Empat
Indonesian capital market directory (ICMD). (2003-2008). Institute for Economic and Financial Research (ECFIN). Jakarta.www.idx.co.id
Kida, Thomas. 1980. An investigation into auditor's continuity and related qualification judgments. Journal of accounting research 18. (Autumn): 506-523.
Koh, Hianchye. 1991. Model prediction and auditor assessment of going concern status. Accounting and business research 21, 84. (Autumn): 331-338.
LaSalle, Randall E., and A. Anandarajan. 1996a. Auditor's views on the type of audit report issued to entities with going concern uncertainties. Accounting horizons 10. (June): 51-72.
LaSalle, Randall E., A. Anandarajan., and A F. Miller. 1996b. going concernuncertainties: disclaimer of opinion versus unqualified opinion with modified wording. Auditing: A journal of practice & theory 15. (Fall): 29-48.
Lenard, Mary J., P. Alam., and D. Booth. 2000. An analysis of fuzzy clustering and a hybrid model for the auditor's going concern assessment. Decision sciences 31. (Fall): 861-884.
Louwers, Timothy J. 1998. The relation between going concern opinions and the auditor's loss function. Journal of accounting research 36. (Spring): 143-156.
Murtanto, and Z. Arfiana. 2002. Analysis of financial statements using the CAMEL ratio and altman method as a tool to predict the failure rate of a bank's business. Accounting, auditing and information research media 2. (August): 44-56.
Mutchler, Jane P. 1985. A multivariate analysis of the auditor's going concern opinion decision. Journal of accounting research 23, 2. (Autumn): 668- 682.
Nogler, George E. 2004. Long-term effects of going concern opinion. Managerial auditing journal 19, 5. pp 681-688.
Petrolena, Thio A. 2004. Consideration of going concern companies in giving audit opinion. Balance 1. (March): 46-55.
American Institute of Public Accountants (AICPA). 1981. The auditor's considerations when a question aries about an entity's continued existence. Statement on auditing standards 34. (March).
American Institute of Public Accountants (AICPA). 1988. The auditor's consideration of an entity's ability to continue as a going concern. Statement on auditing standards 59. (April).
American Institute of Public Accountants (AICPA). 1981. The auditor's considerations when a question aries about an entity's continued existence. Statement on auditing standards 34. (March).
Arens, A Alvin, R J. Elder., and M S. Beasley. 2006. Auditing and assurance services an integrated approach. Pearson International Edition. 11th ed.
Back, Barbro., T. Laitinen., K. Sere., and M. Van Wezel. 1996. Choosing bankruptcy predictors using discriminant analysis, logit analysis, and generic algorithms. Turku center for computer science 40. (September).
Bank Indonesia. Directory of Bank Indonesia (2003-2007). Jakarta: Bank Indonesia.
Casterella, JR, BL Lewis, and PL Walker. 2000. Modeling the audit opinions issued to bankrupt companies: a two-stage empirical analysis. Decision sciences 31. (Spring): 507-530.
Chen, KCY, and BK Church. 1996. Going concern opinions and the market's reaction to bankruptcy fillings. The accounting review 71. (January): 117-128.
Fanny, M., and S. Saputra. 2005. Audit opiniongoing concern: a study based on the bankruptcy prediction model, company growth, and KAP reputation (studies on JSX issuers). National Symposium on Accounting 8. (September): 966-978.
Garson D. 2007. Log-Linear, Logit, and Probit Models.http://www2.chass.ncsu.edu/garson/pa765/logit.htm
Ghazali, Imam. 2001. Multivariate analysis application with SPSS. Publishing Board of Dipenogoro University, Semarang.
Hadad, MD, W. Santoso, and I. Rulina. 2003. Bankruptcy indicators in Indonesia: an additional early warning tools on financial system stability. Directorate of Banking Research and Regulation, Bank Indonesia. (December).
Hadad, MD, W. Santoso, and Sarwedi. 2004. Bankruptcy prediction model for commercial banks in Indonesia. Directorate of Bank Indonesia. (June). Banking Research and Regulation,
Hani., Cleary, and Mukhlasin. 2003. Going concern and audit opinion: a study of banking companies on the JSX. National Symposium on Accounting 6. (Surabaya).
Holder-Webb, LM, and MS Wilkins. 2000. The incremental information content of SAS no. 59 going concern opinions. Journal of accounting research 38. (Spring): 209-219.
opwood, W., J. McKeown, and J. Mutchler. 1989. A test of the incriminal explanatory power of opinions qualified for consistency and uncertainty. The account Hnting review LXIV. (January): 28-48.
Indonesian Accounting Association. 2001. Professional Standards for Public Accountants. Jakarta: Salemba Empat
Indonesian Accounting Association. 2001. Professional Standards for Public Accountants. Jakarta: Salemba Empat
Indonesian capital market directory (ICMD). (2003-2008). Institute for Economic and Financial Research (ECFIN). Jakarta.www.idx.co.id
Kida, Thomas. 1980. An investigation into auditor's continuity and related qualification judgments. Journal of accounting research 18. (Autumn): 506-523.
Koh, Hianchye. 1991. Model prediction and auditor assessment of going concern status. Accounting and business research 21, 84. (Autumn): 331-338.
LaSalle, Randall E., and A. Anandarajan. 1996a. Auditor's views on the type of audit report issued to entities with going concern uncertainties. Accounting horizons 10. (June): 51-72.
LaSalle, Randall E., A. Anandarajan., and A F. Miller. 1996b. going concernuncertainties: disclaimer of opinion versus unqualified opinion with modified wording. Auditing: A journal of practice & theory 15. (Fall): 29-48.
Lenard, Mary J., P. Alam., and D. Booth. 2000. An analysis of fuzzy clustering and a hybrid model for the auditor's going concern assessment. Decision sciences 31. (Fall): 861-884.
Louwers, Timothy J. 1998. The relation between going concern opinions and the auditor's loss function. Journal of accounting research 36. (Spring): 143-156.
Murtanto, and Z. Arfiana. 2002. Analysis of financial statements using the CAMEL ratio and altman method as a tool to predict the failure rate of a bank's business. Accounting, auditing and information research media 2. (August): 44-56.
Mutchler, Jane P. 1985. A multivariate analysis of the auditor's going concern opinion decision. Journal of accounting research 23, 2. (Autumn): 668- 682.
Nogler, George E. 2004. Long-term effects of going concern opinion. Managerial auditing journal 19, 5. pp 681-688.
Petrolena, Thio A. 2004. Consideration of going concern companies in giving audit opinion. Balance 1. (March): 46-55.
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