The Impact of a Going-Concern Audit Opinion on Board of Directors Cover Image

The Impact of a Going-Concern Audit Opinion on Board of Directors
The Impact of a Going-Concern Audit Opinion on Board of Directors

Author(s): Igor Todorović, Jelena Poljašević
Subject(s): Economy, Business Economy / Management, Financial Markets, Accounting - Business Administration, Business Ethics
Published by: Department of Insurance, Faculty of Economics, Management and Accountancy, University of Malta.
Keywords: Audit; Board of Directors; Corporate Governance; Going- Concern Opinion;

Summary/Abstract: Paper examines the impact of a going-concern audit opinion on the corporate governance, measured by the changes in board of directors’ composition. External auditor’s opinion is used as a measure to address agency problems in companies. We examine this impact on sample of 55 companies listed on the Banja Luka Stock Exchange which have received going-concern audit opinion for 2013 financial reports. In this paper, the relationship between going-concern audit opinion and the corporate governance is investigated observing changes in board of director composition and additional requests for rigorous board performance evaluation after the shareholder’s assembly have received external auditor’s report. Results show that board of directors of companies that received going-concern audit opinions have not suffered serious consequences such as rigorous board performance evaluation, reduction of board size or changes of board members. This highlights the importance of measures that need to be put in place in order to increase of external auditor’s role in corporate governance.

  • Issue Year: 3/2016
  • Issue No: 1
  • Page Range: 87-96
  • Page Count: 10
  • Language: English