Factors Affecting Going Concern of the Transport and Logistics Companies

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The COVID-19 pandemic reminded accountants and auditors of one of the most important concepts of modern accounting – the going concern assumption. Going concern refers to a company's ability to make enough money to stay afloat or to avoid bankruptcy. Based on the application of agency theory and signalling theory this study aimed to examine the influence of GCG practices, financial condition and company growth on the going concern of transportation and logistics service sector companies listed on the IDX. This study is associative research with secondary data obtained from the annual report on the IDX website and CGC reports. The data collected for analysis covers the period from 2019-2022. Going concern is proxied by going concern opinion with dummies 1 and 0. GCG practices are measured using disclosure quality based on the CG index covering GCG structures and processes and the performance of its issuers in terms of internal control units, remuneration, and Corporate Secretary. Financial condition is measured using the Altman Z-score prediction model. Corporate growth is proxied by calculating the sales growth ratio based on each corporation's profit/loss statement. The research sample is transportation and logistics service sector companies listed on the IDX in 2019-2022, amounting to 20 companies with a total observation data of 80. The data testing in this study uses logistic regression analysis to determine the predictive power of these financial ratios, which are the most dominant in determining whether a corporation will receive a going concern audit opinion. The researchers found that only financial condition significantly affects the company's going concern in this study. The negative coefficient direction means that transportation and logistics service sector companies that experience poor financial conditions still get a non-going concern opinion where management can convince stakeholders and auditors that they can still maintain their business sustainability. Meanwhile, good corporate governance practices do not significantly affect going concern because investors take into account many other factors to consider the sustainability of the company's business. Company growth also has no significant effect on going concern because companies with profit growth also do not guarantee that the company is free from financial problems that may affect its business continuity.