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Cited by 4Auditing, Earnings Management, GovernanceFinancial Distress and Bankruptcy PredictionCorporate Insolvency and Governance

The DOI matches its Crossref record; 36 of the 36 references it cites were found in a registry or an index.

Evidence on going concern reporting before and after ASU 2014–15

Bakarich, Kathleen, Baranek, Devon·2020·Accounting Research Journal
DOI 10.1108/arj-06-2020-0165
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Abstract

Purpose This study aims to examine the impact of Financial Accounting Standard Board’s Accounting Standard Update (ASU) 2014–15 on auditors’ going concern reporting. ASU 2014–15 provides accounting guidance for managers related to going concern issues, but there is evidence that regulatory changes affect auditor behavior. The authors examine if auditors’ propensity to issue going concern opinions (GCOs) for non-bankrupt, financially distressed firms changes after ASU 2014–15 became effective, and if the proportion of client bankruptcies with prior GCOs changes after ASU 2014–15 became effective. Design/methodology/approach The authors examine audit reports for non-bankrupt, financially stressed firms three years before and after the effective date of ASU 2014–15 to see if the propensity to issue a GCO differs in the pre- vs post-period. The authors then examine bankrupt, financially stressed firms to determine if the proportion of bankruptcies preceded by a GCO differs in the pre- vs post-period. Findings The authors find a significant increase in GCO reporting for non-bankrupt, financially stressed firms in the post-ASU 2014–15 period, suggesting auditor conservatism increased. The propensity for auditors to issue a GCO to bankrupt firms also increased significantly in the post-ASU period, providing evidence that auditors became more accurate, as more bankruptcies were preceded by a GCO than in the pre-ASU period. Originality/value This study uses new legislation which creates an exogenous shock to going concern reporting. Models and techniques are combined from prior literature and extended to investigate auditors’ reporting behaviors using two important and distinct samples.

Overview

Integrity signals

Registry

Crossref · 10.1108/arj-06-2020-0165

Cites

36 of 36 references verified0 citation errors · 0 not checkable

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  • Existing cases address cybersecurity issues in general, but apart from a management-focused case by Srinivasan and Ni (2023), the authors are not aware of any current cases that address the increasing trend of ransomware.

    “Although existing cases address cybersecurity issues in general (Bakarich and Baranek 2020;Boss et al. 2022;Boss, Gray, and Janvrin 2024), we are not aware of any current cases apart from a management-focused case by Srinivasan and Ni (2023) that addresses the increasing trend of ransomware.”

    From Colonial Pipeline: Responding to a Ransomware Attack in the Energy Sector (2026) · cites this paper as Bakarich and Baranek 2020

Citations

Cites

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Research works printed but not linked: 10

  1. 1974, Evaluation of a company as a going concern, Journal of Accountancy, 138, 50
  2. Financial Accounting Standards Board (FASB) (2013), “Project 2013-330: disclosure of uncertainties about an entity’s going concern presumption, online comment letters”, available at: www.fasb.org/jsp/FASB/CommentLetter_C/CommentLetterPage&cid=1218220137090&project_id=2013-300
  3. 2002, Audit reports in the new litigation environment, Accounting Horizons, 16, 17
  4. 1998, Costs associated with going-concern modified audit opinions: an analysis of auditor changes, subsequent opinions and client failures, Advances in Accounting, 16, 117
  5. Krishnan, J. Krishnan, J. and Lee, E. (2018), “Management going concern reporting: impact on investors and auditors”, Working paper, available at: https://pcaobus.org/EconomicAndRiskAnalysis/Conference/Documents/Krishnan-Krishnan-Lee-Management-Going-Concern-Reporting.pdf
  6. 2009, Does client importance affect auditor independence at the office level? Empirical evidence from going-concern opinions, Contemporary Accounting Research, 26, 201, 10.1506/car.26.1.7 · DOI
  7. 1991, Towards an explanation of auditor failure to modify the audit opinions of bankrupt companies, Auditing: A Journal of Practice and Theory, 10, 1
  8. 1990, The relationship between audit technology, client risk profiles and the going-concern opinion decision, Auditing: A Journal of Practice and Theory, 9, 39
  9. 1995, Audit reports for companies in financial distress: before and after SAS No. 59, Auditing: A Journal of Practice and Theory, 14, 50
  10. 1986, Auditor ‘subject-to’ opinions, disclaimers and auditor changes, Auditing: A Journal of Practice and Theory, 6, 95

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Metadata

Authors
Bakarich, K., & Baranek, D.
Affiliations
  • Hofstra University (US)
  • Rider University (US)
ORCID
Venue
Accounting Research Journal
Publisher
Emerald
Published
2020-12-02
Volume
33
Issue
6
Pages
757-772
ISSN
1030-9616 (ISSN-L)
DOI
10.1108/arj-06-2020-0165
OpenAlex
W3108515945
Cited by
4
References
36
Citations by year
2024: 1 · 2023: 1 · 2022: 1 · 2021: 1
FWCI
1.40
Type
journal article
Language
en
Open access
closed
Licence
www.emerald.com/insight/site-policies (tdm)
Locations
Accounting Research Journal (publishedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Auditing, Earnings Management, Governance
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Distress and Bankruptcy Prediction
  • Social Sciences › Law › Corporate Insolvency and Governance
Keywords
FASB, auditor conservatism, auditor behavior, financial distress, bankruptcy, audit reports, accounting standard changes, regulatory change

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