The impact of expected outcomes on going-concern opinions: the case of auditors, bankers and insolvency

Abstract

The evidence confirms that, auditors', bankers' and insolvency practitioners' expected outcomes of wrongly classifying a non-viable firm as viable, is more important than the opposite. However, there is no significant correlation between expected outcomes and individuals' "going-concern" opinions. Furthermore, individuals' perceived roles, risks, and risk attitudes are related to their expected outcomes suggesting a subtle impact of behavioural factors on individuals' decision-making in this context. Finally, a logistic regression model for "going-concern" classifications using all the aforementioned variables has an overall accuracy of 78.10%.