Opinion shopping to avoid going concern audit opinion and subsequent audit quality

• Main Authors: CHUNG, Heesun, SONU, Catherine Heyjung, ZANG, Yoonseok, CHOI, Jong-Hag
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2019
• Subjects: opinion shopping; auditor switch; Type II errors; audit quality; Accounting; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/1805; https://ink.library.smu.edu.sg/context/soa_research/article/2832/viewcontent/Opinion_shopping_av_May_2018.pdf
• Institution: Singapore Management University

Despite regulatory concerns over opinion shopping (OS) behavior, there exists little systematic evidence on the prevalence and consequences of OS to avoid a going concern opinion (GCO). Using Lennox's (2000) framework to identify OS, we find that distressed firms successfully engage in OS to av...