Disclosure of interim review reports: Do interim going concern conclusions have information content?

Grosse, M; Scott, T

Disclosure of interim review reports: Do interim going concern conclusions have information content?

Grosse, M

Scott, T

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Publisher:: American Accounting Association
Publication Type:: Journal Article
Citation:: Auditing: a Journal of Practice and Theory, 2022, 22, (3), pp. 121-157
Issue Date:: 2022-11-22

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Field	Value	Language
dc.contributor.author	Grosse, M https://orcid.org/0000-0001-9156-4351
dc.contributor.author	Scott, T
dc.date.accessioned	2022-11-17T04:23:22Z
dc.date.available	2022-11-17T04:23:22Z
dc.date.issued	2022-11-22
dc.identifier.citation	Auditing: a Journal of Practice and Theory, 2022, 22, (3), pp. 121-157
dc.identifier.issn	0278-0380
dc.identifier.issn	1558-7991
dc.identifier.uri	http://hdl.handle.net/10453/163553
dc.description.abstract	This paper examines the information content of interim review assurance in the Australian mandatory disclosure setting. First, we find a strong negative market reaction to interim going concern conclusions (IGCC) contained in the review of interim financial statements. Second, we find no significant difference between the market reaction to IGCCs and annual going concern opinions (AGCO) received at the annual report audit. Finally, we show IGCCs are significant predictors of subsequent AGCOs, and provide incremental information from the previous annual report audit opinion. Overall, these results contribute to the literature on the benefits of mandatory interim assurance by showing that going concern conclusions contained in interim financial statements provide investors with new and relevant information.
dc.language	English
dc.publisher	American Accounting Association
dc.relation.ispartof	Auditing: a Journal of Practice and Theory
dc.relation.isbasedon	10.2308/ajpt-19-041
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1501 Accounting, Auditing and Accountability
dc.subject.classification	Accounting
dc.title	Disclosure of interim review reports: Do interim going concern conclusions have information content?
dc.type	Journal Article
utslib.citation.volume	22
utslib.for	1501 Accounting, Auditing and Accountability
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	closed_access	*
pubs.consider-herdc	false
dc.date.updated	2022-11-17T04:23:21Z
pubs.issue	3
pubs.publication-status	Published
pubs.volume	22
utslib.citation.issue	3

Abstract:

This paper examines the information content of interim review assurance in the Australian mandatory disclosure setting. First, we find a strong negative market reaction to interim going concern conclusions (IGCC) contained in the review of interim financial statements. Second, we find no significant difference between the market reaction to IGCCs and annual going concern opinions (AGCO) received at the annual report audit. Finally, we show IGCCs are significant predictors of subsequent AGCOs, and provide incremental information from the previous annual report audit opinion. Overall, these results contribute to the literature on the benefits of mandatory interim assurance by showing that going concern conclusions contained in interim financial statements provide investors with new and relevant information.

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http://hdl.handle.net/10453/163553