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Year 2017, Volume: 4 Issue: 3, 256 - 261, 30.09.2017
https://doi.org/10.17261/Pressacademia.2017.693

Abstract

References

  • Arens, A. A., Elder, R. J., & Mark, B. (2012). Auditing and assurance services: an integrated approach. Boston: Prentice Hall.
  • Bell, T. B., & Tabor, R. H. (1991). “Empirical analysis of audit uncertainty qualifications”, Journal of Accounting Research, 29, p.350–370.
  • Caramanis, C., Spathis, C., (2006) "Auditee and audit firm characteristics as determinants of audit qualifications: Evidence from the Athens Stock Exchange", Managerial Auditing Journal, Vol. 21 Issue: 9, p.905-920
  • Chen, K., Church, B. (1992), “Default on debt obligations and the issuance of going concern opinions”, Auditing: A Journal of Practice and Theory, p. 30-49, Fall.
  • Dopouch, N., Holthausen, R. and Leftwich, R. (1987), “Predicting audit qualifications with financial and market variables”, The Accounting Review, Vol. 62 No. 3, p. 431-54.
  • Gaganis, C., Pasiouras, F., & Doumpos, M. (2007). “Probabilistic neural networks for the identification of qualified audit opinions”, Expert Systems with Applications, 32, p.114–124.
  • International Standards on Auditing (IAS) 700 –Forming an Opinion and Reporting on Financial Statements International Standard on Auditing (ISA) 705 Modifications To The Opinion In The Independent Auditor’s Report
  • Keasey, K., Watson, R. and Wynarzcyk, P. (1988), “The small company audit qualification: a preliminary investigation”, Accounting & Business Research, Vol. 18 No. 72, p. 323-33.
  • Laitinen, E. K., &Laitinen, T. (1998). “Qualified audit reports in Finland: Evidence from large companies”. European Accounting Review, 7, p. 639–653.
  • Spathis, C. (2003), “Audit qualification, firm litigation, and financial information: an empirical analysis in Greece”, International Journal of Auditing, Vol. 7 No. 1, p. 71-85.
  • Zdolšek, D., Jagrič, T., MarjanOdar,M.,(2015). "Identification of auditor’s report qualifications: an empirical analysis for Slovenia", Ekonomskaistraživanja 28.1, p. 994-1005.

IDENTIFICATION OF KEY PERFORMANCE INDICATORS OF AUDITOR’S REPORTS: EVIDENCE FROM BORSA ISTANBUL (BIST)

Year 2017, Volume: 4 Issue: 3, 256 - 261, 30.09.2017
https://doi.org/10.17261/Pressacademia.2017.693

Abstract

Purpose-  This paper investigates the key performance indicator
variables that predict auditors' decisions to issue unqualified or modified
(a qualified opinion,  adverse opinion, and a disclaimer of opinion) audit reports for nonfinancial companies listed
in Borsa Istanbul for the year 2016.

Methodology-
Logistic Regression Model is developed to determine
the key performance indicators of the qualification of the auditors’ reports and
the predictive accuracy of the estimated model is
evaluated.

Findings- Results of
the analysis show that the
qualification of an audit report is mainly associated with return on
asset, return on equity, times interest earned ratio and whether the audit firm
is classified as BIG 4 or not.
The estimated model distinguishes between unqualified and other opinions
for nonfinancial companies with a 92.4 % classification accuracy.







Conclusion- Although the overall accuracy of the
logistic regression model is very high,
regarding the population characteristics there is an increased risk
that the study results might be biased. The fact that the study is done for a
single period and the number of companies (240 out of 263) which have
unqualified audit opinions is very high might lead the results to be biased.
This result also leads to a conclusion that other
issues rather than the deterioration in financial ratios might induce the
companies to have an audit report other than unqualified.

References

  • Arens, A. A., Elder, R. J., & Mark, B. (2012). Auditing and assurance services: an integrated approach. Boston: Prentice Hall.
  • Bell, T. B., & Tabor, R. H. (1991). “Empirical analysis of audit uncertainty qualifications”, Journal of Accounting Research, 29, p.350–370.
  • Caramanis, C., Spathis, C., (2006) "Auditee and audit firm characteristics as determinants of audit qualifications: Evidence from the Athens Stock Exchange", Managerial Auditing Journal, Vol. 21 Issue: 9, p.905-920
  • Chen, K., Church, B. (1992), “Default on debt obligations and the issuance of going concern opinions”, Auditing: A Journal of Practice and Theory, p. 30-49, Fall.
  • Dopouch, N., Holthausen, R. and Leftwich, R. (1987), “Predicting audit qualifications with financial and market variables”, The Accounting Review, Vol. 62 No. 3, p. 431-54.
  • Gaganis, C., Pasiouras, F., & Doumpos, M. (2007). “Probabilistic neural networks for the identification of qualified audit opinions”, Expert Systems with Applications, 32, p.114–124.
  • International Standards on Auditing (IAS) 700 –Forming an Opinion and Reporting on Financial Statements International Standard on Auditing (ISA) 705 Modifications To The Opinion In The Independent Auditor’s Report
  • Keasey, K., Watson, R. and Wynarzcyk, P. (1988), “The small company audit qualification: a preliminary investigation”, Accounting & Business Research, Vol. 18 No. 72, p. 323-33.
  • Laitinen, E. K., &Laitinen, T. (1998). “Qualified audit reports in Finland: Evidence from large companies”. European Accounting Review, 7, p. 639–653.
  • Spathis, C. (2003), “Audit qualification, firm litigation, and financial information: an empirical analysis in Greece”, International Journal of Auditing, Vol. 7 No. 1, p. 71-85.
  • Zdolšek, D., Jagrič, T., MarjanOdar,M.,(2015). "Identification of auditor’s report qualifications: an empirical analysis for Slovenia", Ekonomskaistraživanja 28.1, p. 994-1005.
There are 11 citations in total.

Details

Journal Section Articles
Authors

Burcu Adiloglu

Bengu Vuran

Publication Date September 30, 2017
Published in Issue Year 2017 Volume: 4 Issue: 3

Cite

APA Adiloglu, B., & Vuran, B. (2017). IDENTIFICATION OF KEY PERFORMANCE INDICATORS OF AUDITOR’S REPORTS: EVIDENCE FROM BORSA ISTANBUL (BIST). Journal of Economics Finance and Accounting, 4(3), 256-261. https://doi.org/10.17261/Pressacademia.2017.693

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