Company Financial Conditions

Oct 13, 2025 by recoveryshake.com 118 views

The Influence of Audit Quality, Company Financial Condition, Company Size, and Company Growth on the Going Concern Audit Opinion: A Study of Manufacturing Companies Listed on the Indonesia Stock Exchange for the 2013-2016 Period

Introduction

In the business world, especially for companies listed on the stock exchange, the going concern audit opinion is one of the important indicators that reflects the company's ability to continue its operations in the near future. This study was designed to analyze how several factors such as audit quality, company financial condition, company size, and company growth affect the Going Concern audit opinion on manufacturing companies listed on the Indonesia Stock Exchange between 2013 and 2016.

The Importance of Going Concern Audit Opinion

The going concern audit opinion is a critical indicator of a company's ability to continue its operations in the near future. It reflects the company's financial health and its ability to meet its financial obligations. A going concern audit opinion is essential for investors, creditors, and other stakeholders who rely on the company's financial statements to make informed decisions. In this study, we aimed to investigate the factors that influence the going concern audit opinion and its implications for manufacturing companies listed on the Indonesia Stock Exchange.

Research Methodology

This research is included in the causal research category using a sample of 150 manufacturing companies listed on the Indonesia Stock Exchange. Through the purposive sampling method, 26 companies that meet the research criteria were taken as samples, resulting in a total of 104 observations. The data used in this study are financial statements published on the official website of the Indonesia Stock Exchange (www.idx.co.id). The variables studied consisted of audit quality, company financial condition, company size, and company growth as an independent variable, while the Going Concern audit opinion became a dependent variable. To analyze the relationship between variables, this study uses the logistics regression method.

Research Result

From the results of the analysis, found several interesting findings related to the influence of independent variables on the Going Concern audit opinion:

Audit Quality

Research shows that audit quality has a negative influence, but is not significant on the Going Concern audit opinion. This shows that although audit quality is considered important, in the context of this research, the auditor may not provide adequate opinions related to company resilience.

Audit quality is a critical factor in ensuring the accuracy and reliability of financial statements. However, the results of this study suggest that audit quality may not be a significant factor in influencing the going concern audit opinion. This finding may be due to the fact that auditors may not always provide adequate opinions related to company resilience, even if they have high audit quality.

Company Financial Conditions

Unlike the audit quality, the company's financial condition has been proven to have a significant negative influence on the Going Concern audit opinion. This means that companies with poor financial conditions are more likely to be given an opinion not going concern, reflecting the potential of financial problems that can threaten business continuity.

The company's financial condition is a critical factor in determining its ability to continue its operations in the near future. The results of this study suggest that companies with poor financial conditions are more likely to receive a going concern audit opinion. This finding highlights the importance of maintaining a healthy financial condition to ensure business continuity.

Company Size

Company size shows a positive but not significant effect on the Going Concern audit opinion. This discovery may indicate that a larger company is not always safer than the problem of business continuity.

The company's size is often associated with its ability to withstand financial difficulties. However, the results of this study suggest that company size may not be a significant factor in influencing the going concern audit opinion. This finding may be due to the fact that larger companies may still face financial difficulties, even if they have a larger size.

Company Growth

This can be interpreted that growth that is not well managed can create risks that can endanger the company's operational continuity.

Company growth is a critical factor in determining a company's ability to continue its operations in the near future. The results of this study suggest that poorly managed growth can create risks that can endanger the company's operational continuity. This finding highlights the importance of managing growth effectively to ensure business continuity.

Conclusion

From this study, it appears that the company's financial condition and company growth have a significant impact on the Going Concern audit opinion, while the quality of the audit and the company's size does not show significant effects. This finding becomes important for stakeholders, especially for investors and company management, in understanding the factors that can influence perceptions related to business continuity.

It is essential for companies to conduct a comprehensive evaluation of financial conditions and growth to maintain positive opinion from the auditor. With a better understanding of the influence of these various factors, companies can take the steps needed to increase their durability in competitive markets.

Implications of the Study

The findings of this study have several implications for stakeholders, including investors, creditors, and company management. Firstly, the study highlights the importance of maintaining a healthy financial condition to ensure business continuity. Companies with poor financial conditions are more likely to receive a going concern audit opinion, which can negatively impact their reputation and creditworthiness.

Secondly, the study suggests that poorly managed growth can create risks that can endanger the company's operational continuity. Companies must manage their growth effectively to ensure that they can continue to operate in the near future.

Finally, the study highlights the importance of audit quality in ensuring the accuracy and reliability of financial statements. However, the results of this study suggest that audit quality may not be a significant factor in influencing the going concern audit opinion.

Limitations of the Study

This study has several limitations that must be acknowledged. Firstly, the study only examined the influence of audit quality, company financial condition, company size, and company growth on the going concern audit opinion. Other factors, such as industry, market conditions, and regulatory requirements, may also influence the going concern audit opinion.

Secondly, the study only examined manufacturing companies listed on the Indonesia Stock Exchange. The findings of this study may not be generalizable to other industries or countries.

Finally, the study only used financial statements published on the official website of the Indonesia Stock Exchange as data. Other data sources, such as company reports and industry publications, may also provide valuable insights into the going concern audit opinion.

Future Research Directions

This study provides several avenues for future research. Firstly, future studies can examine the influence of other factors, such as industry, market conditions, and regulatory requirements, on the going concern audit opinion.

Secondly, future studies can examine the going concern audit opinion in other industries or countries. This can provide valuable insights into the factors that influence the going concern audit opinion in different contexts.

Finally, future studies can examine the impact of the going concern audit opinion on company performance and reputation. This can provide valuable insights into the consequences of receiving a going concern audit opinion and the steps that companies can take to mitigate these consequences.

Conclusion

In conclusion, this study provides valuable insights into the factors that influence the going concern audit opinion. The findings of this study highlight the importance of maintaining a healthy financial condition and managing growth effectively to ensure business continuity. The study also highlights the importance of audit quality in ensuring the accuracy and reliability of financial statements. However, the results of this study suggest that audit quality may not be a significant factor in influencing the going concern audit opinion.
Frequently Asked Questions (FAQs) about the Influence of Audit Quality, Company Financial Condition, Company Size, and Company Growth on the Going Concern Audit Opinion

Q: What is the going concern audit opinion?

A: The going concern audit opinion is a critical indicator of a company's ability to continue its operations in the near future. It reflects the company's financial health and its ability to meet its financial obligations.

Q: What are the factors that influence the going concern audit opinion?

A: The factors that influence the going concern audit opinion include audit quality, company financial condition, company size, and company growth.

Q: How does audit quality influence the going concern audit opinion?

A: Research shows that audit quality has a negative influence, but is not significant on the Going Concern audit opinion. This means that although audit quality is considered important, in the context of this research, the auditor may not provide adequate opinions related to company resilience.

Q: How does company financial condition influence the going concern audit opinion?

A: The company's financial condition has been proven to have a significant negative influence on the Going Concern audit opinion. This means that companies with poor financial conditions are more likely to be given an opinion not going concern, reflecting the potential of financial problems that can threaten business continuity.

Q: How does company size influence the going concern audit opinion?

A: Company size shows a positive but not significant effect on the Going Concern audit opinion. This discovery may indicate that a larger company is not always safer than the problem of business continuity.

Q: How does company growth influence the going concern audit opinion?

A: This can be interpreted that growth that is not well managed can create risks that can endanger the company's operational continuity.

Q: What are the implications of the study for stakeholders?

A: The findings of this study have several implications for stakeholders, including investors, creditors, and company management. Firstly, the study highlights the importance of maintaining a healthy financial condition to ensure business continuity. Companies with poor financial conditions are more likely to receive a going concern audit opinion, which can negatively impact their reputation and creditworthiness.

Q: What are the limitations of the study?

A: This study has several limitations that must be acknowledged. Firstly, the study only examined the influence of audit quality, company financial condition, company size, and company growth on the going concern audit opinion. Other factors, such as industry, market conditions, and regulatory requirements, may also influence the going concern audit opinion.

Q: What are the future research directions?

A: This study provides several avenues for future research. Firstly, future studies can examine the influence of other factors, such as industry, market conditions, and regulatory requirements, on the going concern audit opinion.

Q: What are the practical implications of the study for companies?

A: The study highlights the importance of maintaining a healthy financial condition and managing growth effectively to ensure business continuity. Companies must conduct a comprehensive evaluation of their financial conditions and growth to maintain positive opinion from the auditor.

Q: What are the implications of the study for auditors?

A: The study highlights the importance of audit quality in ensuring the accuracy and reliability of financial statements. However, the results of this study suggest that audit quality may not be a significant factor in influencing the going concern audit opinion.

Q: What are the implications of the study for regulators?

A: The study highlights the importance of regulatory requirements in ensuring the accuracy and reliability of financial statements. Regulators must ensure that companies comply with regulatory requirements to maintain a healthy financial condition and manage growth effectively.

Conclusion