Company Financial Condition

Oct 13, 2025 by recoveryshake.com 110 views

The Influence of Audit Quality, Company Financial Condition, Previous Year's Audit Opinion, and Company Growth on the Going Concern Audit Opinion in Mining Companies Listed on the 2013-2016 Indonesia Stock Exchange

Introduction

The Going Concern audit opinion is a crucial aspect of a company's financial health, particularly in the mining sector. This study aims to examine the factors that influence the Going Concern audit opinion in mining companies listed on the Indonesia Stock Exchange between 2013 and 2016. The study focuses on the impact of audit quality, company financial condition, previous year's audit opinion, and company growth on the Going Concern audit opinion.

Research Background

The study involved a population of 41 mining companies listed on the Indonesia Stock Exchange. To obtain relevant data, researchers accessed financial statements and independent auditor reports published on the official website of the Indonesia Stock Exchange. The sampling method used was purposive sampling, which produced 19 companies as samples for three years of observation, from 2014 to 2016, with a total of 57 units of analysis.

Methodology

In data analysis, researchers applied descriptive statistical techniques and logistics regression to understand the relationship between these variables. The results of the analysis showed that the previous year's audit opinion had a positive and significant influence on the Going Concern audit opinion. Meanwhile, audit quality variables, company financial conditions, and company growth did not show a significant effect on the going concern audit opinion.

Analysis and Explanation

Audit Quality

Although the audit quality should be able to provide a clear picture of the company's condition, the results show that there is no significant influence between the quality of the audit and the opinion of going concern. This may be caused by the auditor's inability to detect problems that can affect the survival of the company, especially in fluctuated industries such as mining. The quality of audit is crucial in providing an accurate picture of a company's financial health. However, the results of this study suggest that audit quality may not be the primary factor influencing the Going Concern audit opinion.

Company Financial Condition

Healthy financial conditions usually have a positive effect on the opinion of going concern. However, in this study, financial conditions did not have a significant effect. It can be interpreted that even though the company has a good financial record, external factors, such as unstable commodity prices, can reduce auditor's confidence in the company's ability to survive. A company's financial condition is not the only factor that determines its ability to survive. External factors, such as market fluctuations, can also play a significant role in determining a company's financial health.

Previous Year's Audit Opinion

The findings that the previous year's audit opinion had a positive effect on the Going Concern opinion showing the strong influence of the audit history of the current assessment. If the company has received the previous Going Concern opinion, the auditor tends to pay greater attention to the signs of uncertainty in the financial statements. The previous year's audit opinion is a significant factor in determining the Going Concern audit opinion. Auditors tend to pay greater attention to signs of uncertainty in the financial statements if the company has received a previous Going Concern opinion.

Company Growth

Company growth is often expected to support survival. However, the results showed that company growth did not have a significant influence on the Going Concern opinion. Fast growth can cause greater risk, for example in managing resources and operational efficiency. Company growth is not a guarantee of survival. Fast growth can also lead to greater risk, particularly in managing resources and operational efficiency.

Conclusion

This study provides an important insight into the factors that influence the Going Concern audit opinion in the Indonesian mining sector. The results show that only the previous year's audit opinion had a significant influence. Therefore, companies need to pay attention to how previous opinions can affect the auditor's perception of their survival. Meanwhile, it is essential to dig deeper about other factors that can contribute to changes in audit opinion in a broader context.

Recommendations

By understanding this dynamics, mining companies can be more proactive in managing aspects that can increase the reputation and trust of auditors and other stakeholders. Mining companies should focus on improving their audit quality and financial condition. Additionally, companies should pay attention to how previous opinions can affect the auditor's perception of their survival. By doing so, mining companies can be more proactive in managing aspects that can increase the reputation and trust of auditors and other stakeholders.

Limitations

This study has several limitations. Firstly, the study only focused on mining companies listed on the Indonesia Stock Exchange between 2013 and 2016. Secondly, the study only examined the impact of audit quality, company financial condition, previous year's audit opinion, and company growth on the Going Concern audit opinion. Future studies should examine the impact of other factors on the Going Concern audit opinion. Additionally, future studies should also examine the impact of the Going Concern audit opinion on the financial health of mining companies.

Future Research Directions

Future studies should examine the impact of other factors on the Going Concern audit opinion. Additionally, future studies should also examine the impact of the Going Concern audit opinion on the financial health of mining companies. Future studies should also examine the impact of the Going Concern audit opinion on the reputation and trust of auditors and other stakeholders. By understanding the dynamics of the Going Concern audit opinion, mining companies can be more proactive in managing aspects that can increase the reputation and trust of auditors and other stakeholders.
Frequently Asked Questions (FAQs) about the Influence of Audit Quality, Company Financial Condition, Previous Year's Audit Opinion, and Company Growth on the Going Concern Audit Opinion in Mining Companies Listed on the 2013-2016 Indonesia Stock Exchange

Q: What is the Going Concern audit opinion?

A: The Going Concern audit opinion is a crucial aspect of a company's financial health, particularly in the mining sector. It is an opinion expressed by the auditor on whether the company has the ability to continue its operations for the foreseeable future.

Q: What are the factors that influence the Going Concern audit opinion?

A: The study examined the impact of audit quality, company financial condition, previous year's audit opinion, and company growth on the Going Concern audit opinion. The results showed that only the previous year's audit opinion had a significant influence.

Q: Why is audit quality important in determining the Going Concern audit opinion?

A: Audit quality is crucial in providing an accurate picture of a company's financial health. However, the results of this study suggest that audit quality may not be the primary factor influencing the Going Concern audit opinion.

Q: What is the significance of the previous year's audit opinion in determining the Going Concern audit opinion?

A: The previous year's audit opinion is a significant factor in determining the Going Concern audit opinion. Auditors tend to pay greater attention to signs of uncertainty in the financial statements if the company has received a previous Going Concern opinion.

Q: Why did company growth not have a significant influence on the Going Concern audit opinion?

A: Company growth is often expected to support survival. However, the results showed that company growth did not have a significant influence on the Going Concern opinion. Fast growth can cause greater risk, for example in managing resources and operational efficiency.

Q: What are the implications of this study for mining companies?

A: By understanding the dynamics of the Going Concern audit opinion, mining companies can be more proactive in managing aspects that can increase the reputation and trust of auditors and other stakeholders. Mining companies should focus on improving their audit quality and financial condition.

Q: What are the limitations of this study?

A: This study has several limitations. Firstly, the study only focused on mining companies listed on the Indonesia Stock Exchange between 2013 and 2016. Secondly, the study only examined the impact of audit quality, company financial condition, previous year's audit opinion, and company growth on the Going Concern audit opinion.

Q: What are the future research directions for this study?

A: Future studies should examine the impact of other factors on the Going Concern audit opinion. Additionally, future studies should also examine the impact of the Going Concern audit opinion on the financial health of mining companies. Future studies should also examine the impact of the Going Concern audit opinion on the reputation and trust of auditors and other stakeholders.

Q: What are the practical implications of this study for auditors and other stakeholders?

A: By understanding the dynamics of the Going Concern audit opinion, auditors and other stakeholders can be more proactive in managing aspects that can increase the reputation and trust of mining companies. Auditors should pay greater attention to signs of uncertainty in the financial statements, particularly if the company has received a previous Going Concern opinion.

Q: What are the policy implications of this study for regulatory bodies?

A: Regulatory bodies should consider the findings of this study in developing policies and guidelines for mining companies. Regulatory bodies should also consider the impact of the Going Concern audit opinion on the financial health of mining companies and the reputation and trust of auditors and other stakeholders.