Techn. Universiẗat, Diss., 2006--Darmstadt.

Thesis (Ph. D.)--University of Wisconsin--Madison, 1953. / Typescript. Vita. eContent provider-neutral record in process. Description based on print version record. Includes bibliographical references (leaves 216-228).

Introduction: The history of going concern have been surrounded by uncertainties. The concept becomes relevant in times of economic crisis. The accuracy of existing procedures concerning GCOs have been questioned, where firms file for bankruptcy without any prior indications of going concern issues. Therefore, it has been questioned if the auditors are better than anyone else to predict the future. The standards and regulations leave out large room for professional judgement, thus there is a great risk of fluctuations in the judgement process in practice. Without a complete understanding of going concern, one could question the added value of the concept, and what conclusions can be made from prior literature. Purpose: The purpose of our study is to enhance the understanding of the auditor’s going concern assessment by looking further into their application and treatment of the concept in practice. This will provide a more complete nuanced picture of auditor’s conceptualization and their process of evaluating going concern.   Method: Our purpose in this study is achieved by using a qualitative research method. The empirical findings are collected through using a semi-structured interview approach. The interview guide is developed from our model (Figure 2) which is derived from previous literature in the field. Our sample consists of 6 authorized auditors from the Jönköping region. Findings: The findings indicate that the perception shifts based on the process. Going concern is a difficult assessment, which is highly influenced by subjective judgement. Auditor’s application process in practice can be identified as a step-process. Between these steps, the perception changes. The process is characterized by auditors seeking evidence to the contrary of issuing a GCO.

Revision är en viktig funktion för bolags intressenter som en säkerhet att bolagets företagsinformation är att lita på. Revisionsskandaler runt om i världen har dock gjort att revisionskvaliteten ifrågasatts. I syfte att öka kvaliteten på revisionen har det införts krav på revisorsrotation för bolag av allmänt intresse i Sverige. För en personvald revisor får uppdragstiden som längst vara sju år. Sedan måste bolaget byta revisor. Vidare menar Martin Johansson, tidigare VD för Svenska Revisorsamfundet (SRS), att över 200 uppdrag per revisor påverkar revisionskvaliteten negativt och att ett spann mellan 70 och 150 uppdrag är optimalt.Studiens syfte är att beskriva och analysera om revisionsuppdragets längd och antalet uppdrag påverkar revisionskvaliteten och att diskutera detta i termer av oberoende och kompetens. Genom att mäta going concern-yttranden från revisorn räkenskapsåret innan det år ett bolag gick i konkurs visar studien inget samband mellan längden på revisionsuppdraget och revisionskvalitet. Det är således inte möjligt att slå fast att kortare eller längre revisionsuppdrag ger bättre eller sämre revisionskvalitet. Inte heller finner studien något samband mellan antalet uppdrag och revisionskvalitet. Studien finner således inte något optimalt antal uppdrag med hänsyn till revisionskvalitet. Däremot återfinns de undersökta revisorerna i spannet strax ovanför 70 till 150 uppdrag. / Audit is an important function for corporate stakeholders as an assurance that the company's corporate information is to be trusted. Due to audit scandals around the world, the quality of the audit has been questioned. In order to increase the quality of the audit, requirements have been introduced for auditor rotation for companies of general interest in Sweden. For a person-elected auditor, the term of office may not exceed seven years. Later the company must change the auditor. Furthermore, Martin Johansson, former CEO of the Swedish Auditors' Association (SRS), believes that over 200 assignments per auditor adversely affect the quality of the audit and that a range between 70 and 150 assignments is optimal.The purpose of the study is to describe and analyze whether the length of the audit assignment and the number of assignments affect the quality of the audit and to discuss this in terms of independence and competence. By measuring going concern statements from the auditor for the fiscal year before the company went into bankruptcy, the study shows no relationship between the length of the audit assignment and the quality of the audit. It isn’t possible to state that shorter or longer audit assignments provide better or worse audit quality. Nor does the study find any connection between the number of assignments and audit quality. The study doesn’t find an optimal number of assignments with regard to audit quality. By contrast, the auditors surveyed are just above the 70 to 150 assignments.

Drawing on the relevant psychology literature, three procedural variables that could influence the auditors' information processing when making going concern opinion decisions were identified. These procedural variables are the decision frame, the order in which evidence is evaluated and the initial belief held by the auditor. With respect to the decision frame, it was predicted that belief revision after processing contrary information (mitigating factors) is higher for auditors who frame their initial hypothesis in terms of viability (failure). This prediction hinges on the assumption that more weight is put on disconfirmatory information than on confirmatory information, holding "information content" constant. Second, denoting P(C) as the auditors' judgment just before processing contrary information (mitigating factors), it was hypothesized that contrary information (mitigating factors) has a bigger effect on belief revision as ex ante P(C) increases (decreases). Finally with respect to the order of evaluating evidence, it was posited that recency effects occur in belief revision and that these recency effects will be manifest in the auditors' opinion decision. These predictions were tested in a field experiment using 70 experienced auditors from four Big Eight firms. Results of the experiment provided support for the predictions relating to the initial belief and the order in which evidence was evaluated. However, the predictions relating to the decision frame were not supported. Furthermore, the study indicated that auditors exhibited considerable variability in their interpretation of substantial doubt (the standard of proof in SAS 59). Whereas some auditors interpreted this requirement as the preponderance of probability, others required a substantially higher level of probability as a threshold of proof for issuing unqualified opinions. Incidentally, it was discovered that this variability was partly accounted for by auditors' firm affiliation. Implications of these results for the audit review, the standard setting process and the nature of expertise in auditing are discussed.

Security analysts play a central role in the functioning of financial markets through their privileged position as intermediaries between firms and investors. Analyst activity is important to reduce information uncertainty but it is not unbiased. On the one hand, the literature shows that these sophisticated agents promote market efficiency by facilitating the incorporation of new information into stock prices. On the other hand, there is evidence that analysts underreact to negative information and that they tend to be optimistic about firms they follow. Recent studies show that the market does not assimilate immediately the disclosure of a first-time going-concern modified (GCM) audit report. This accounting event is part of a wide range of bad news events which investors are particularly inefficient at dealing with. My thesis explores how analysts deal with the GCM audit report and whether they facilitate the correct assimilation of such information into stock prices. In particular, I use a sample of 924 firms for which their auditors disclose a GCM audit report for the first-time between 01.01.1994 and 31.12.2005. I find that security analysts anticipate the publication of a first-time GCM audit report. My results show that within the one-year period before the GCM disclosure, security analysts downgrade the average recommendation for GCM firms from “buy” to “hold” whereas similar non-GCM firms maintain an average “buy” rating. A number of robustness tests confirm that this finding is not sensitive to the criteria used to select the non-GCM control firm. Moreover, analysts are more likely to cease coverage of GCM firms prior to the GCM event than for matched control firms. In addition, I show that analysts react to the publication of a GCM audit report by ceasing coverage of GCM firms. My results suggest that investors do not recognize an average “hold” recommendation for a stock of a firm immediately before the announcement of a GCM audit report as an unfavourable message even considering that it represents a downgrade from a previous “buy” rating. In particular, I find that the negative short-term market reaction to the publication of a GCM audit report is significantly higher for firms with pre-event analyst coverage compared to firms with no pre-event analyst coverage. This suggests that analyst activity may be misleading the market in terms of the saliency of pre-GCM unfavourable news by issuing “disconfirming opinions” to the market and thus increasing the “surprise” associated with the publication of a GCM audit report. In addition, I show that analyst post-GCM coverage does not increase the efficiency with which the market assimilates the GCM audit report into stock prices. In particular, I fail to find significant differences between the post-GCM return performance of covered firms compared to firms with no analyst coverage. However, I show that the percentage of covered firms following the GCM disclosure is significantly higher for those with best post-GCM return performance than for those with worst post-GCM return performance. This suggests that post-GCM return performance explains the decision of analysts to cover GCM firms but analyst coverage does not influence significantly the post-GCM return performance of such firms. Overall, my thesis contributes to the accounting and finance literature by showing that analyst activity is not providing investors with adequate value-relevant information for their investment decisions in the GCM bad news domain. Firstly, the reluctance of analysts to issue a clear unfavourable message about the stocks of GCM firms seems to explain why the “surprise” associated with the publication of a GCM audit report is greater for covered firms than for non-covered firms. Secondly, the tendency of analysts to cease coverage of GCM firms and the low level of analyst coverage following the GCM announcement may explain why analyst coverage does not reduce the magnitude of the post-GCM negative drift. As such, analyst contribution to the price-discovery process in this case is likely confined to firms with high levels of analyst coverage.

Thesis (LL.M. (Labour Law))--North-West University, Potchefstroom Campus, 2008.

Thesis (LL.M. (Labour Law))--North-West University, Potchefstroom Campus, 2008.

Thesis (LL.M. (Labour Law))--North-West University, Potchefstroom Campus, 2008.

Zugl.: Münster (Westfalen), Univ., 2006