...Joel Owens; K. Kelli Saunders; Samantha Schachner; Todd A. Thornock SUMMARY A current FASB standard requires management to assess the ability of the entity to continue as a going concern (GC) and disclose any substantial doubt about such. Using contextualized experiments wherein the auditor does...

... as an indicator of future distress, we examine whether the valuation allowance is associated with auditors’ going concern evaluations. We find evidence that the existence and magnitude of the valuation allowance, as well as changes in the allowance, are positively associated with the likelihood that a company...

... members. Examining the relative tenure of executives and audit committee members, we find that greater management influence is associated with a lower propensity of the auditor to issue a modified going concern opinion to a distressed client. We also find that greater management influence is associated...

...Jean Bédard; Carl Brousseau; Ann Vanstraelen SUMMARY Using a “natural experiment” provided by a change in Canadian auditing standards requiring an emphasis of matter paragraph in the auditor's report (GC-EOM) when the financial statements include a going concern uncertainty disclosure (GC-FS...

...Adi Masli; Christine Porter; Susan Scholz SUMMARY We develop and test a model of the determinants of going concern reporting for banks. Banks are an essential component of the economy, but most audit market studies exclude them because they have significant differences from other companies. Our...

...Nathan R. Berglund; John Daniel Eshleman; Peng Guo SUMMARY Auditing theory predicts that larger auditors will be more likely to issue a going concern opinion to a distressed client. However, the existing empirical evidence on this issue is mixed. We attribute these mixed results to a failure...

... utilizing the cost-leadership “defender” strategy to receive both going concern and material weakness opinions. Our empirical evidence supports this prediction. Specifically, we find that, among a sample of financially troubled firms, prospectors are significantly more likely than defenders to receive...

...., ability in transforming corporate resources to revenues, and audit fees and a going concern opinion. We use the managerial ability measure recently developed by Demerjian, Lev, and McVay (2012) . We find that incremental to firm-level attributes, both audit fees and the likelihood of issuing a going...