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DOI https://doi.org/10.18551/rjoas.2018-11.04
THE EFFECT OF NON-FINANCIAL FACTORS ON ACCEPTANCE OF GOING CONCERN AUDIT OPINION IN MANUFACTURING COMPANIES LISTED
IN INDONESIA STOCK EXCHANGE
Armadiyanti Putri
Department of Accounting, University of Airlangga, Surabaya, Indonesia E-mail: [email protected]
ABSTRACT
The going concern audit opinion is issued by the auditor to ascertain whether the company can maintain its survival. Expenditures of going concern audit opinion is very useful for users of financial statements to make the right decisions in investing, because when an investor will make an investment it is necessary for them to know the company's financial condition, especially concerning the survival of the company. This study aims to analyze the non-financial factors that influence the acceptance of going concern audit opinion on manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2013-2016. The variables used in this study are the level of disclosure, the length of audit time (audit lag), and the previous year's audit opinion. This type of research is quantitative research with data analysis using logistic regression. In this study, the method used was purposive sampling and obtained a total sample of 176 companies that met the sample criteria. The results of the study show that the previous year's audit opinion variable affects the acceptance of going concern audit opinion. While disclosure and audit lag do not affect the acceptance of going concern audit opinion. This research contributes as (1) empirical evidence and material consideration for the auditor in carrying out its audit process, especially in terms of providing a going concern audit opinion in Indonesia; and (2) empirical evidence for investors and potential investors regarding going concern (business continuity of a company) so that they can make the right decision in making an investment. The independent variables used in this study only explain 14.4% of the dependent variable while the remaining 85.6% is explained by other variables.
KEY WORDS
Going concern, audit opinion, disclosure, audit lag, previous year's audit opinion.
According to the Financial Accounting Standards Guidelines (PSAK) No. 1, the purpose of the financial statements is to provide information about the financial position, financial performance, and cash flow of the entity that is beneficial for most users of the report in making economic decisions (IAI, 2009). Because financial statements are intended for parties who have an interest in the media in seeing the condition of the company, the role of an independent party is the auditor is needed in assessing the fairness and reliability of the company's financial statements. The auditor will provide opinions on the results of the assessment of the company's financial statements.
Aside from being an intermediary between the interests of investors, potential investors, and the interests of the company, auditors also have an important role in predicting company failures. One of the hopes of investors and other users of financial statements is an early warning for companies that experience financial distresss delivered through audit opinions (Geiger et al, 1995). The American Institute of Certified Public Accountants (AICPA) requires that auditors must disclose explicitly whether a client company can maintain its survival until a year later after reporting (Januarti & Fitrianasari, 2008). According to the Auditing Standards Guidelines (PSA) No.30 of the Public Accountants Professional Standards (SPAP) Section 341 of 2011, the auditor is responsible for giving consideration and giving opinions as to whether there are doubts about the company in maintaining its survival within a period of not more than one year from the date reports being audited (IAI, 2011).
An independent auditor will provide an opinion in accordance with the actual conditions of the company. Non going concern audit opinion is given if the auditor in the process of identifying information about the condition of the company does not find any major doubts about the company's ability to maintain its survival, whereas the going concern opinion is given to companies whose auditors are doubtful in maintaining the continuity of the company's business. According to the Auditing Standards Guidelines (PSA) No.30 of Public Accountant Professional Standards (SPAP) Section 341 in 2011, going concern audit opinions are opinions issued by the auditor to ascertain whether the company can maintain its survival (IAI, 2011). Expenditures of going concern audit opinion is very useful for users of financial statements to make the right decisions in investing, because when an investor will make an investment it is necessary for them to know the company's financial condition, especially concerning the survival of the company (Hani et. Al ., 2003). It can be concluded that the goal of issuing a going concern audit opinion is to predict the bankruptcy of a company.
This study aims to analyze non-financial factors that influence the acceptance of going-concern audit opinions, namely: the level of disclosure, the length of audit time (audit lag), and the previous year's audit opinion. Transparency of information disclosure through disclosure of financial statements that facilitates the auditor's task in providing opinions is something that management needs to pay attention to. Haron et al. (2009); Junaidi & Hartono (2010); Zulfikar & Syafruddin (2013) found that disclosure has a significant effect on going concern opinion. The greater the extent of financial information disclosed by companies experiencing poor financial conditions, the auditor will find it easier to find evidence in assessing the business continuity of the company (Junaidi & Hartono, 2010).
Companies that disclose less accounting information tend to receive unqualified opinions from external auditors (Gaganis & Pasiouras, 2007). Astuti & Darsono (2012) research reveals that a high level of disclosure does not cause a company to avoid receiving the going concern opinion by the auditor. This can happen because the higher the level of disclosure made by the company, it can create an unfavorable impression and is considered an excessive presentation. In addition, the presentation is too detailed and not important can actually obscure significant information that makes financial statements difficult to interpret (Astuti and Darsono (2012).
The violation of the principle of disclosure in Indonesia was once carried out by PT Perusahaan Gas Negara (Persero) Tbk (PGAS). In this case there has been an irregularity in the stock price which has decreased by 31.8% and then a decline of 23.26%. The Capital Market Supervisory Agency (Bapepam-LK) or now the Financial Services Authority (OJK) has found indications of violations in the disclosure principle and the practice of insider trading. In the case of disclosure, the violations committed by PGAS were the delay in notifying the public about the delay of the South Sumatra-West Java pipeline project which was carried out by PGAS for 35 days and did not convey information on the reduction in gas volume and gas in- formation to the public so that PT Perusahaan Gas Negara (Persero) Tbk has violated Article 86 paragraph (2) of Law No. 5/1995 jo (Kementerian Badan Usaha Milik Negara, 2007). Based on these cases, it can be concluded that the importance of disclosure is intended not to harm investors, potential investors, and auditors in assessing the condition of the company.
Research shows that auditors often provide going concern audit opinions when audit reports are delayed longer (McKeown et al, 1991). The auditor delays the issuance of audit reports in the hope that the company can solve its financial problems and avoid going concern opinions. Astuti & Darsono (2012) research results; Lennox (2000); Praptitorini & Januarti (2007); indicates that audit lag affects the acceptance of going concern audit opinion. However, Januarti's research (2009) shows that the length of audit time shows insignificant results and does not affect the provision of going concern opinion. Based on the decision of the Chairman of Bapepam and LK Number 346 / BL / 2011 concerning Submission of Periodic Financial Statements of Issuers or Public Companies, in Attachment to Regulation Number X.K.2, it is stated that the annual financial statements must be accompanied by an accountant's report in the context of auditing the financial statements.
The annual financial report must be submitted to Bapepam and LK and announced to the public no later than the end of the third month after the date of the annual financial report (Bapepam LK, 2011). The delay in the publication of financial statements may indicate a problem in the issuer's financial statements. This can be used as a guideline by auditors and public company management that the maximum time limit for audit lag is 90 days (3 months).
Furthermore Rahayu's research (2007); Ramadhany (2004); Zulfikar & Syafruddin (2013) found evidence of a going concern audit opinion received the previous year with a going concern audit opinion for the current year. There is a significant positive relationship between the previous year's going concern audit opinion and the going concern audit opinion for the current year. Mutchler (1985) examined the effect of public information availability on the predicted going-concern audit opinion, using discriminant analysis which included the previous year's audit opinion type with the highest predictive accuracy, which was 89.9%.
This study uses objects of manufacturing companies listed on the Indonesia Stock Exchange (IDX) vulnerable research time starting in 2013-2016. Manufacturing companies are chosen because manufacturing companies are good pilot companies that have complete cost details and tend to be responsive to environmental conditions. In addition, going concern audit opinions are more often issued by auditors in manufacturing companies (Ramadhany, 2004).
THEORY AND HYPOTHESES DEVELOPMENT
Agency Theory. This study uses agency theory as a theoretical basis. Agency relations are described as a contract under one or more principals that involves agents to carry out several services for them by delegating decision-making authority to agents (Jensen & Meckling, 1976). Agency problems arise because of a conflict of interest between the principal and the agent. Each party, both principal and agent, seeks to maximize personal interests. The principal has a desire to increase the value of investment in the company and get the maximum profit for his investment. In addition, the agent has a personal interest that is receiving adequate compensation for the performance and obligations that he has done.
Agents are tasked with running the company and producing financial reports and other company information as a form of management accountability. The financial statements will describe the financial condition of the company which will be used by the principal as a basis for decision making. Agencies (management) do not always act according to the wishes of shareholders, in part due to moral hazard (Praptitorini & Januarti, 2007). Agents as parties that produce financial reports and other company information have a desire to optimize their interests, so that agents may manipulate data on the condition of the company. Agents are parties who are more aware of internal information and prospects of the company in the future compared to principals (shareholders), it can lead to information inequality (information asymmetry) because the financial statements presented by management do not reflect the actual condition of the company. Information asymmetry will influence decision making by users
Audit Opinion. According to the Public Accountants Professional Standards (SPAP) Section 110 Audit Standard, the purpose of auditing financial statements by independent auditors in general is to express opinions about fairness in all material matters, financial position, results of operations, changes in equity, and cash flow in accordance with the principle accounting that is generally accepted in Indonesia (IAI, 2011). The auditor is responsible for planning and carrying out the audit to obtain adequate assurance about whether the financial statements are free from material misstatement, whether caused by errors or fraud. Audit opinion is given by the auditor through several stages of audit so that the auditor can provide conclusions on the opinions that must be given on the financial statements being audited (Rahman & Siregar, 2012). According to the Public Accountant Professional Standards (Audit Standards Guide 29 Section 508), there are five types of audit opinions, namely:
• Unqualified Opinion;
• Unqualified Opinion with Explanatory Language;
• Qualified Opinion;
• Adverse Opinion;
• Disclaimer of Opinion.
Going Concern Audit Opinion. The going concern audit opinion is an audit opinion which in the auditor's judgment there is an inability or significant uncertainty over the survival of the company in carrying out its operations within a reasonable period of time, not more than one year from the date of the financial statement being audited (IAI, 2011). The auditor determines the receipt of a going concern audit opinion if in the audit process there are conditions and events that lead to doubt about the survival of the company. With the management plan, effectiveness of the management plan, and sufficient disclosure of information, an entity is considered able to maintain its business continuity in the long term and will not be liquidated within a period of less than 1 year.
Auditing Standard 341 Section, Audit Standard Guidelines No. 30 states that in carrying out the audit process, auditors are required not only to look at the things revealed in the financial statements but also to be more aware of potential things that can interfere with the going concern of a company. This is the reason that the auditor is also responsible for the survival of a business unit (IAI, 2011). Some conditions that may affect the auditor in issuing a going concern audit opinion (Audit Standard 341.3 Section, Audit Standard Guidelines No. 30 paragraph 6, SPAP 2011) include:
• Negative trends (financial management ratio, business growth ratio, and leverage);
• Other instructions about possible financial difficulties;
• Internal problems (level of compliance with regulations and policies);
• External problems that have occurred (litigation indicators).
Effect of Disclosure on Going Concern Audit Opinions. Haron et al. (2009); Junaidi & Hartono (2010); Zulfikar & Syafruddin (2013) found that disclosure affects the going concern opinion. The higher the level of company disclosure, the higher the probability of the company receiving a going concern audit opinion. Astuti & Darsono (2012) research reveals that a high level of disclosure does not cause the company to avoid going concern audit opinion by the auditor. This can happen because the higher the level of disclosure made by the company, it can create an unfavorable impression and is considered an excessive presentation. Then the hypothesis formulated is as follows:
H0: Disclosure does not affect the going concern audit opinion;
H1: Disclosure affects the going concern audit opinion.
Effect of Audit Lag on Going Concern Audit Opinions. Auditors more often give going concern opinions when audit reports are late (McKeown et al, 1991). The aim of the auditor is to delay the issuance of audit reports so that the company can solve its financial problems and avoid going concern opinions. Astuti & Darsono (2012) research results; Lennox (2000); Praptitorini & Januarti (2007) shows that audit lag affects the going concern audit opinion. However, Januarti's research (2009) shows that the length of audit time shows the results do not affect the provision of going concern opinion. Then the hypothesis formulated is as follows:
H0: Audit lag does not affect the going concern audit opinion;
H2: Audit lag affects the going concern audit opinion.
Effect of Previous Year's Audit Opinion on Going Concern Audit Opinions. The going concern audit opinion that has been received by the auditee in the previous year will be an important consideration factor for the auditor in issuing a going concern audit opinion in the current year if the auditee's financial condition does not show signs of improvement or absence of a management plan that can be realized to improve the condition of the company. Nogler (1995) found evidence that after the auditor issues a going-concern audit opinion, the company must show a significant financial increase to obtain a net opinion in the following year, if there is no increase in finance, the going-concern audit opinion will be given again. Rahayu's Research (2007); Ramadhany (2004); Zulfikar & Syafruddin (2013) strengthen the evidence that there is a positive relationship between the previous year's going concern audit opinion and the going concern audit opinion for the current year. If in the
previous year the auditor had issued a going concern audit opinion, it would be more likely that the auditor would republish the going concern audit opinion the following year. Then the hypothesis formulated is as follows:
H0: Previous year's audit opinion does not affect the going concern audit opinion; H3: The previous year's audit opinion affects the going-concern audit opinion. The research framework that underlies this research can be described as follows:
Figure 1 - Conceptual framework
METHODS OF RESEARCH
This study uses a quantitative approach, namely research that focuses on testing hypotheses that explain the relationship between variables (Indriantoro & Supomo, 2012: 27). In this study describes the relationship between the independent and dependent variables associated with the acceptance of going concern opinion. The independent variables used in this study are disclosure, audit lag, and previous year's audit opinion. The dependent variable used in this study is going concern opinion.
Population and Research Sample. The population in this study were all manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the 2013-2016 period. The manufacturing industry was chosen to avoid the existence of industrial effects, namely different industrial risks between one industrial sector to another. The research sample was selected using a purposive sampling approach. Based on the sample selection process that has been carried out, obtained a total sample of 176 manufacturing companies on the Indonesia Stock Exchange (IDX).
Going Concern Audit Opinion (GC). The going concern audit opinion is an audit opinion which in the auditor's judgment there is an inability or significant uncertainty over the survival of the company in carrying out its operations within a reasonable period of time, not more than one year from the date of the financial statement being audited (IAI, 2011). This variable is measured using a dummy variable. Auditees who receive a going concern audit opinion are given code 1 while the auditee who receives a non going concern audit opinion is given a code 0. Audit opinion included in the going concern opinion is unqualified with explanatory language. While non-going concern audit opinions include unqualified opinions, qualified opinions, adverse opinions and disclaimer opinions in accordance with the explanation of Section 508 Audit Standard, PSA No. 29 (IAI, 2011).
Disclosure (DL). Disclosure is the level of disclosure of information provided as financial attachments in the form of footnotes or additions (Tanor, 2009). This variable is measured using an index, where the determination of the index is done by using the disclosure score revealed by a company. If the company discloses information items in its financial statements and annual reports, then a score of 1 will be given. After scoring, disclosure level can be determined by the following formula (Ardiani, et al, 2012; Nanda, 2015):
Total number of disclosure scores fulfilled
Disclosure Level = -
Maximum score amount
The level of disclosure presented by the company is measured by disclosure items. The disclosure items table is as follows:
Table 1 - Disclosure Items
No. Explanation
1. Summary of Important Financial Data
2. The highest, lowest, and closing share price information, as well as the number of shares traded for each quarterly period in the last 2 (two) financial years (if any).
3. Board of Commissioners report regarding the assessment of the performance of the board of directors regarding the management of the company.
4. Board of Commissioners report regarding the views on the prospects of the company's business prepared by the directors
5. Directors report regarding company performance
6. Report of the board of directors regarding the description of business prospects
7. Directors report regarding the implementation of corporate governance that has been carried out by the Company
8. Company name and address
9. Company brief history
10. Fields and business activities of the company include the types of products and or services produced
11. Organizational structure in the form of a chart
12. Vision and mission of the company
13. Name, position and brief curriculum vitae of members of the board of commissioners
14. Name, position and brief curriculum vitae of members of the board of directors
15. Number of employees and description of competency development (for example: aspects of employee education and training that have been and will be carried out);
16. Description of the name of the shareholder and percentage of ownership
17. The names of subsidiaries and associated companies, percentage of share ownership, line of business, and operating status of these changes
18. Chronology of the listing of shares and changes in the number of shares from the beginning of recording up to the end of the financial year and the name of the stock exchange where the company's shares are listed
19. Name and address of capital market supporting institutions and or professions
20. Awards and certifications received by companies both nationally and internationally.
21. Name and address of subsidiaries and or branch offices or representative offices.
22. Overview of operations per business segment
23. Analysis of financial performance which includes a comparison between the financial performance of the year concerned and the previous year
24. Business prospects of the company in connection with industry, the economy in general and the international market and can be accompanied by quantitative supporting data if there are reliable data sources
25. Marketing aspects of company products and services include: marketing strategies and market share.
26. Dividend policy and date and amount of dividends
27. Corporate Governance
28. Responsibility of directors for financial statements
29. Audited annual financial statements
30. Signatures of directors and board members
31. Information about social and environmental responsibility
32. Summary of financial statistics for 3-5 years
33. Information about research and development
Source: Bapepam Lk, 2012 (KEP-431/BL/2012).
Audit lag (ALAG). Audit lag is the number of calendars between the date of the compilation of financial statements and the date of completion of field work (Januarti, 2009). Based on the decision of Bapepam and LK No. 346 / BL / 2011 concerning the Submission of Periodic Financial Statements of Issuers or Public Companies, in Attachment to Regulation Number X.K.2, it is stated that the annual financial statements must be accompanied by an Accountant's report in order to audit financial statements (Bapepam, 2011). The annual financial report must be submitted to Bapepam and LK and announced to the public no later than the end of the third month after the date of the annual financial report. The criteria in this variable are divided into 2 groups of criteria, namely:
• The audit lag is less or equal to 90 days (ALAG<90 Days), which indicates that the company can publish its annual financial statements on time;
• An audit lag of more than 90 days (ALAG> 90 days), which indicates that the company cannot publish its annual financial statements on time in the sense of delays in publication of the annual report.
The audit lag variable is measured by calculating the number of days from the closing date of the company's book to the date stated in the independent auditor's report.
Previous Year's Audit Opinion (PRIOR). The previous year's audit opinion is an audit opinion received by the auditee in the previous year or 1 year before the research year. The previous year's audit opinion was grouped into 2, namely auditee with going concern audit opinion and non going concern audit opinion. This variable is measured using a dummy variable, if the previous year's audit opinion is a going-concern opinion, it is given code 1 and if the non-going concern audit opinion is given code 0.
Data Analysis Techniques and Research Models. The analytical tool used in this study is logistic regression analysis. In this study can be analyzed by logistic regression because there is no need for the assumption of normality in the independent variable data. Logistic regression analysis was performed using the Statistical Packagefor Social Science (SPSS) 16.0 for Windows program. The logistic regression model equation used in this study is as follows:
CC
ln-^- = a + p. DL + p7ALAG + p^PRIOR + £. (1)
1—GC ± Z J
Where:
GC
ln-= probability of receiving a going concern audit opinion;
1—GC
a = constant;
p = regression coefficient;
DL = Disclosure Level;
ALAG = Audit Lag;
PRIOR = Previous Year Audit Opinion;
£ =Residual.
RESULTS AND DISCUSSION
Descriptive Statistics Test Results. Based on Table 2, the audit opinion variable (Y) which consists of going concern audit opinion and non going concern has a minimum value of 0 which is owned by several sample companies including Aneka Kemasindo Utama Tbk. (renamed Alam Karya Unggul Tbk.), Suparma Tbk., Hanjaya Mandala Sampoerna Tbk., Darya Varia Laboratoria Tbk., etc., while the maximum value of 1 is owned by a number of sample companies including Holcim Indonesia Tbk., Mulia Industrindo Tbk., Nusantara Inti Corpora Tbk., Apac Citra Centertex Tbk., Jemblo Cable Company Tbk., And so forth. The minimum value indicates that the sample company receives a non going concern audit opinion, whereas the maximum value indicates that the sample company receives a going concern audit opinion.
Tabel 2 - Descriptive Statistics
Variable N Minimum Maximum Mean Std. Deviation
OPINI AUDIT 176 0 1 0,45 0,499
DL 176 0,454545 1,000000 0,85227287 0,096515367
ALAG 176 31 151 73,52 15,635
PRIOR 176 0 1 0,39 0,490
Source: Data Processed (2017).
The average value of 0.45 (45%) indicates that of the 176 sample companies studied, there were 79 sample companies receiving a going concern audit opinion (GC), and 97
sample companies received non going concern (NGC) audit opinions. So it can be said that the majority of sample companies (55% of the total sample companies studied) obtain an audit opinion non going concern (NGC) which indicates that the company has a good financial condition so that it can maintain its business activities (going concern) or can be said to be far from the direction liquidation. The standard deviation value that is greater than the average (mean) indicates the occurrence of variation or a relatively large difference in the audit opinion (Y) studied. This indicates that audit opinion on manufacturing companies in Indonesia in 2013-2016 is 45%.
The variable level of disclosure (disclosure) has a minimum value of 0.454545 owned by Darya Varia Laboratoria Tbk and a maximum value of 1.000000 is owned by Semen Gresik Tbk with an average value of 0.85227287 and a standard deviation value of 0.096515367. A standard deviation value that is smaller than the average value (mean) shows good results, because the standard deviation reflects the variation or difference in data is smaller than the average value (mean). This indicates that the level of disclosure of information for manufacturing companies in Indonesia in 2013-2016 is 85.23%, which means that the average research sample almost presents the disclosure perfectly in accordance with the disclosure item.
The audit lag variable (ALAG) has a minimum value of 31 days owned by Holcim Indonesia Tbk. and a maximum value of 151 days owned by Davomas Abadi Tbk. with an average value (mean) of 73.52 and a standard deviation value of 15.635. A standard deviation value that is smaller than the average value (mean) shows good results, because the standard deviation reflects the variation or difference in data is smaller than the average value (mean). This indicates that the audit lag for manufacturing companies in Indonesia in 2013-2016 is 73.52 days which means that the average company publishes its annual financial report in 74 days. This indicates that the company can publish its annual financial statements on time because audit lag criteria are less or equal to 90 days (ALAG<90 Days).
The previous year's audit opinion variable (PRIOR) has a minimum value of 0 and a maximum value of 1 with an average value of 0.39 and a standard deviation value of 0.490. The standard deviation value that is greater than the average (mean) value indicates that there is a relatively large variation or difference in the previous year's audit opinion variable. The average value of 0.39 indicates that the previous year's audit opinion with code 1 was more accepted by the company compared to those in the previous year did not receive a going concern opinion. On average 69 companies that receive going concern opinion, in the previous year also received going concern opinion, and 107 companies that received going concern opinion in the previous year did not receive a going concern opinion.
Determination Coefficient Test Results:
Table 3 - Determination Coefficient
Step -2 Log likelihood Cox & Snell R Square Nagelkerke R Square
1 222.123 .108 .144
Source: Data Processed (2017).
Based on table 3 above, Nagelkerke R Square value is 14.4%, which means the dependent variable can be explained by an independent variable of 14.4%, while the remaining 85.6% is explained by other variables outside the research model such as opinion shopping , debt defaults, company financial conditions, and other financial ratios such as research conducted by other researchers.
Results of the Regression Model Feasibility Test. The feasibility of the regression model was assessed using Hosmer and Lemeshow's Goodness of Fit Test. Table 4 shows the results of the Hosmer and Lemeshow's Goodness of Fit Test. Based on the table, it can be seen that the significance value is 0.248. The significant value obtained is above 0.05, which means that hypothesis 0 (Ho) cannot be rejected (accepted). This means that the model is able to predict the value of its observations or the model can be accepted because it matches the observational data so that this model can be used for further analysis.
Step
Table 4 - Hosmer and Lemeshow's Goodness of Fit Test
Chi-square Df Sig.
1 10,246
Source: Data Processed (2017).
8
0,248
Logistic Regression Model Test Results. Based on the estimated parameter values in the Variables in The Equation, the regression model is formed, namely:
ln-
GC
1 -GC
= a + ß1 DL + ß?ALAG + ß^ PRIOR + £
ln
GC
1 - GC
= -2,447 + 0,379DL + 0,019ALAG + 1,307 PRIOR + £
Variable
Table 5 - Logistic Regression Coefficient Test Results
Coefficient Regression Standard Error
t Count
Sig.
Constant -2,447 1,644 0,087 0,136
Disclosure Level (DL) 0,379 1,699 1,460 0,824
Audit Lag (ALAG) 0,019 0,010 1,019 0,068
Previous year's audit opinion (PRIOR) 1,307 0,329 3,694 0,000
Source: Data Processed (2017).
Based on the results of table 5, the information disclosure level variable (DL) shows a positive regression coefficient of 0.379 with a significance level (p) of 0.824, greater than a = 5%. Because the significance level is greater than a = 5% then H1 which states that disclosure affects the going concern audit opinion is not successfully supported. This study failed to prove that the level of information disclosure (DL) affects the going concern opinion.
Audit lag variable (ALAG) in table 5 shows a positive regression coefficient of 0.019 with a significance level (p) of 0.068, greater than a = 5%. Because the level of significance is greater than a = 5% then H2 which states that audit lag affects the going concern audit opinion is not successfully supported. This study failed to prove that audit lag affects the going concern opinion.
The previous year's audit opinion variable (PRIOR) shows a positive regression coefficient of 1.307 with a significance level (p) of 0.000, smaller than a = 5%. Because the significance level is smaller than a = 5%, H3 which states that the previous year's audit opinion has an effect on the going concern audit opinion successfully supported. This study succeeded in proving that the previous year's audit opinion affected the going concern opinion.
Effect of Disclosure Level on Going Concern Audit Opinions. The level of disclosure of information is the provision of information by companies both positive and negative which can affect investment decisions. Users of financial statements require disclosure to better understand the information contained in the financial statements. Based on table 5, it can be concluded that the level of disclosure does not affect the going concern audit opinion because the significance value is 0.824 which is greater than the predetermined significance level of 0.05. The results of this study support the results of previous research conducted by Astuti & Darsono (2012) which revealed that the high level of information disclosure does not cause the company to avoid the acceptance of the going concern audit opinion by the auditor. This can happen because the higher the level of disclosure made by the company, it can create an unfavorable impression and is considered an excessive presentation. In the process of entering the data level of disclosure of information, it is widely known that companies that have an index value close to 1 and have a value of 1 also receive a going concern audit opinion.
Effect of Audit Lag on Going Concern Audit Opinions. Audit lag is the number of calendars between the date of the compilation of financial statements and the date of
completion of field work (Januarti, 2009). According to Kartika (2009), audit delay is the length of the audit completion period measured from the closing date of the financial year to the date of issuance of the audit report. Audit lag is also called audit delay.
Based on table 5, it can be concluded that audit lag does not affect the acceptance of going concern audit opinion because the significance value is 0.068 which is greater than the predetermined significance level of 0.05. The results of this study support the results of previous research conducted by Januarti (2009) which revealed that the length of audit (audit lag) does not cause the company to avoid going concern audit opinion by the auditor.
The longer the audit lag is estimated that the auditee will be problematic and cause the acceptance of going concern audit opinion. However, in this study, in reality the auditor does not provide a going concern audit opinion. This is made possible by auditors who audit auditees for long periods of time who have conducted long-term audit engagements. This is evidenced by Januarti (2009) that during the observation, many auditors made audit engagements with the auditee for 10 years without change. This can cause the auditor to lose its independence. Some other causes are possible because the auditor must conduct many tests, so that managers' conduct negotiations related to business continuity uncertainty or the auditor expects to solve problems faced with the auditee to avoid issuing a going concern audit opinion without doing anything contrary.
Effect of Previous Year's Audit Opinions on Going Concern Audit Opinions. Mutchler (1985) examined the effect of public information availability on the predicted going-concern audit opinion, using discriminant analysis which included the previous year's audit opinion type with the highest predictive accuracy, which was 89.9%. If the auditor issues a going-concern audit opinion in the previous year, it is more likely that the company will receive a going cocern audit opinion in the current year (Santosa & Wedari, 2007).
Based on table 5, it can be concluded that the previous year's audit opinion affects the going-concern audit opinion because the significance value is 0,000 which is smaller than the predetermined significance level of 0.05. The results of this study support the results of previous studies conducted by Rahayu (2007); Ramadhany (2004); Zulfikar & Syafruddin (2013) which states that there is a significant positive relationship between the going-concern audit opinion of the previous year and the acceptance of the going concern audit opinion for the current year.
The going concern audit opinion that has been received by the auditee in the previous year will be an important consideration factor for the auditor in issuing a going concern audit opinion in the current year if the auditee's financial condition does not show signs of improvement or absence of a management plan that can be realized to improve the condition of the company. Nogler (1995) found evidence that after the auditor issues a going-concern audit opinion, the company must show a significant financial increase to obtain a net opinion in the following year, if there is no increase in finance, the going-concern audit opinion will be given again. Rahayu (2007); Ramadhany (2004); Zulfikar & Syafruddin (2013) reinforce the evidence that there is a significant positive relationship between the previous year's going concern audit opinion and the going concern audit opinion for the current year.
CONCLUSION, LIMITATION AND SUGGESTIONS
This study aims to analyze the effect of variable levels of disclosure (audit disclosure), length of audit time (audit lag), and previous year's audit opinion on going concern audit opinions on manufacturing companies during 2013-2016. The results of logistic regression research indicate that the variable level of disclosure and audit lag does not affect the going-concern audit opinion, whereas the previous year's audit opinion affects the going-concern audit opinion.
Limitations in this study are (1) researchers only use non-financial variables, namely disclosure, audit lag, and previous year's audit opinion; (2) the research period used is only 4 years, so to see the negative trends in the company is still lacking; (3) the independent variable used in this study only explained 14.4% of the dependent variable while the remaining 85.6% was explained by other variables. Based on the limitations of the results of
the above research, the suggestion that the researcher can give is that the researcher is expected to be able to add independent variables and increase the influence of the independent variables that are greater than this research such as the implementation of management strategies listed on the disclosure of the company's annual report, mechanism of Corporate Governance, opinion shopping and other financial factors. Then, further research is expected to increase the period of research to see the negative trends that exist in the company.
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