Open AccessThe Effect of Financial Distress, Debt Default and Audit Tenure on Going Concern Opinion
Author(s) -
Bambang Leo Handoko,
M. Rizkhi Perdana Kusuma
Publication year - 2019
Publication title -
international journal of recent technology and engineering
Language(s) - English
Resource type - Journals
ISSN - 2277-3878
DOI - 10.35940/ijrte.c6427.118419
Subject(s) - going concern , business , creditor , stock exchange , accounting , auditor's report , audit , debt , financial distress , nonprobability sampling , finance , sample (material) , financial ratio , actuarial science , financial system , population , chemistry , demography , chromatography , sociology
One of the accounting assumptions is going concern. Going concern is how company can survive in long time business operation. Going concern becomes very crucial for users of financial statements, namely investors and creditors. If the company in which the investor invests funds and the creditors lend their funds is bankrupt, then the investment and credit lent are in vain and the investor and creditor suffer losses. This study aims to examine the effect of financial distress, debt default, and audit tenure on the acceptance of going concern audit opinion in the period 2014-2018. This study uses secondary data from manufacturing companies financial report which listed in Indonesian Stock Exchange, using purposive sampling method, we obtained 28 companies that are feasible, so that the sample from the study amounted to 140 samples. Statistical tests were performed using SPSS version 24.0 using logistic regression analysis. The results of this study show that financial distress variables have a significant negative effect while debt default and audit tenure have a positive effect on the acceptance of going-concern audit opinion.