Abstract
This article is dedicated to exploring the dialogue between shareholders, management, partners, government and auditors regarding the status of banking sector entities as ‘going concerns’. The purpose of this article is to develop and validate an approach to the study of factors influencing auditors’ opinion on going concerns.The authors identify factors which affect auditors’ professional conduct in establishment of an opinion on an entity as a going concern. Articles were retrieved from the Scopus and Web of Science databases and analysed for relevant factors, and a number of research hypotheses are formulated, among which the modification of legislative regulations on bankingand auditing activity is identified as a key factor. The state of auditing activity and the banking sector during 2009-2019 is evaluated. Additionally, in order to identify periods during which a significant influence of a selected factor is expected, a novel analytical method was devised based on the nature of modifications of legislative regulation of bankingand auditing activity and the period of such modification.The following factors are significant influences on auditors’ decisions on the going concern status of credit organisations: evolution of auditing standards, implementation of external audit quality control, development of banking regulation and supervision, and interaction of auditors with financial institutions and regulators. Evidence was also discovered ofconclusions recorded against entities inconsistent with the real conditions of individual banks.The authors have established a basis for an integrated study of the influence of factors on the professional conduct of auditors in providing opinions on the going concern status of audited entities, and have proposed further research prospects as related to establishing and measuring the relationship between audit report types based on bank statements andfactors describing the results of their activities.
Highlights
An auditor’s opinion on an audited entity’s going concern may result in various social and economic consequences for its stakeholders. This is precisely why such opinions should be formed by means of a dialogue between auditors and the actual and prospective users of the auditor’s evaluation. The context of such dialogue should be established according to auditing standards and the key emphases should be established through the professional conduct of a particular auditor
The point of departure of this research was the widely-held view of audit service users that imperfection in legislative and regulatory acts and the inconsistency of certain regulations have an adverse effect on the perception and development of the audit concept
We propose that the influence of determining factors on auditors’ professional conduct should be studied in respect of a certain type of auditee
Summary
An auditor’s opinion on an audited entity’s going concern may result in various social and economic consequences for its stakeholders. This is precisely why such opinions should be formed by means of a dialogue between auditors and the actual and prospective users of the auditor’s evaluation. The context of such dialogue should be established according to auditing standards and the key emphases should be established through the professional conduct of a particular auditor. The opinion on a going concern rests on an auditor’s professional judgment and requires an individual approach to professional skepticism due to a significant impact of the uncertainty factor
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