Financial Condition and Audit Factors Influencing Going Concern Audit Opinions

Abstract

Abstract:

Research aims: This study aims to analyze the influence of audit quality, financial distress, audit tenure, and company growth on the going concern audit opinion for companies in the basic materials sector listed on the Indonesia Stock Exchange during the 2021-2024 period.

Design/Methodology/Approach: This study a quantitative approach with the logistic regression method. The data used were secondary data obtained from the financial statements of companies in the basic materials sector for the period 2021-2024.

Research findings: The result of the study indicate that audit quality and audit tenure do not affect the going concern audit opinion. Conversely, financial distress and company growth do affect the going concern audit opinion. The higher the level of financial distress, the greater the likelihood that a company will receive a going concern opinion, whereas positive company growth reduces that likelihood.

Theoretical contribution/Originality: This study contributes to the advancement of accounting and auditing, particularly regarding the factors that influence going concern audit opinions, and enriches the empirical literature on the basic materials sector in Indonesia.

Practitioner/Policy implication: The findings of this study can serve as a basis for company management, auditors, and investors in assessing the company’s financial condition and business sustainability, as well as in making economic decisions.

Research limitation/Implication: This study is limited to the basic materials sector and the 2021-2024 observation period; therefore, the results cannot be generalized to all sectors. Further research is recommended to expand the scope of sectors and include other relevant variables.

Keywords: Audit Quality, Financial Distress, Audit Tenure, Company Growth, Going Concern Audit Opinion.