Legal Regimes and Investor Response to the Auditor’s Going-Concern Opinion
This article examines how legal regime may affect the market’s reaction to the auditor’s going-concern (GC) opinion. We hypothesize that, ceteris paribus, investors in a creditor-friendly bankruptcy regime (the United Kingdom) will react more adversely to a first-time GC opinion indicating increased...
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| Veröffentlicht in: | Journal of accounting, auditing & finance auditing & finance, 2017-01, Vol.32 (1), p.40-72 |
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| container_title | Journal of accounting, auditing & finance |
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| creator | Kausar, Asad Taffler, Richard J. Tan, Christine E. L. |
| description | This article examines how legal regime may affect the market’s reaction to the auditor’s going-concern (GC) opinion. We hypothesize that, ceteris paribus, investors in a creditor-friendly bankruptcy regime (the United Kingdom) will react more adversely to a first-time GC opinion indicating increased risk of loss associated with bankruptcy than do investors in a debtor-friendly bankruptcy regime (the United States). Our empirical results are consistent with this expectation. These findings are strengthened by additional analysis of the impact of the recent convergence in bankruptcy regime between the United States and United Kingdom on the market reaction to GC opinions in the United States. Our findings demonstrate a specific situation where the auditing standards and institutional factors interact, with their joint impact affecting the market’s reaction to the GC opinion. |
| doi_str_mv | 10.1177/0148558X15602390 |
| format | Article |
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| identifier | ISSN: 0148-558X |
| ispartof | Journal of accounting, auditing & finance, 2017-01, Vol.32 (1), p.40-72 |
| issn | 0148-558X 2160-4061 |
| language | eng |
| recordid | cdi_proquest_journals_1851078358 |
| source | SAGE Complete; Business Source Complete |
| subjects | Auditing standards Auditors opinions Bankruptcy Going concern assumption International comparisons Studies |
| title | Legal Regimes and Investor Response to the Auditor’s Going-Concern Opinion |
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