The Impact of Accounting Firm Size, Previous Audit Opinion, Auditor Switching and Company Size on The Issuance of Going Concern Opinion
Abstract. The financial statement is prepared in order to support stakeholders in making
the right decisions. The accuracy of the financial statements is tested by external auditor.
When there are doubts about the company's ability to maintain its business continuity, the
auditor will give an opinion with the explanatory paragraph on going concern. Going
concern opinion becomes important because it can provide an early warning to
stakeholders about the company's future condition.
Larger accounting firm is more motivated to issue a going concern opinion. The previous
year going concern opinion will encourage the auditor issue the same opinion in the current
year. The auditor switching is done to prevent undesirable opinion such as going concern
opinion. Smaller companies have higher risk of receiving going concerns opinion than
larger companies. This study is testing the influence of size of accounting firm, previous
audit opinion, auditor switching, and company size on going concern opinion.
The data used in this study is secondary data obtained from audited annual financial
statements available at the website of Indonesia Stock Exchange. There are 61 companies
in the wholesale and retail trade industry as population of this research and 42 companies
selected as samples. The study period is limited from year of 2014 to 2017. Data analysis is
using Microsoft Excel and SPSS software version 24.0 with binary logistic regression
The results show that CPA size, auditors switching, and firm size do not have an effect on
the issuance of going concern opinion. While the previous year audit opinion has an
influence on the issuance of going concern opinion. The simultaneous test obtain a result
that the CPA size, previous year audit opinion, auditor switching and firm size have
simultaneously influence on the issuance of going concern opinion.
Keywords: Accounting firm size, previous year audit opinion, auditor switching, company