Open AccessThe Impact of Client Size and Financial Performance on Audit Opinion: Evidence from a Developing Market
Author(s) -
Ahmed Diab,
Samir Ibrahim Abdelazim,
Aref M. Eissa,
Eid Mahmoud Abozaid,
Mona Mohamed Elshaabany
Publication year - 2021
Publication title -
academic journal of interdisciplinary studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.148
H-Index - 5
eISSN - 2281-3993
pISSN - 2281-4612
DOI - 10.36941/ajis-2021-0020
Subject(s) - audit , accounting , auditor's report , context (archaeology) , business , logistic regression , audit evidence , developing country , joint audit , external auditor , actuarial science , internal audit , economics , medicine , geography , economic growth , archaeology
This research investigates the effect of audit client size and its financial performance on audit opinion in the Egyptian audit market. A few studies have investigated the association between these factors in the audit context, especially in African developing countries. Data are manually collected from the annual financial reports of firms registered in the Egyptian Stock Market, focusing on a sample of EGX 70 from 2012 to 2016, and binary logistic regression is used in data analysis. We found that the company size is insignificantly, positively, related to a qualified, rather than an unqualified, type of audit opinion. In contrast, the client's financial performance has a significant but negative relationship with the qualified type of audit opinion. This study provides insights for managers and investors in developing countries to understand and perceive audit opinions in these contexts.
Received: 31 October 2020 / Accepted: 12 December 2020 / Published: 17 January 2021