Abstract
This study aimed to examine whether the financial performance, in this case the predictions of Altman Model affect audit going concern opinion. The samples in this study consist of 59 companies and data variables are taken from the Indonesian Capital Market Directory and annual financial statement reporting. This study utilizes the logistic regression. The results from the logistic regression analysis show that every year in the period of the study 2012-2014, percentage correct of research model are 86,4%, 88.1%, and 93.2% respectively. This research also found that every year in the period of study that there is a negative significant effect on prediction of the Altman model towards the audit going concern opinion. In other word, the more a company’s predicted secure by Altman Model, the less likely get a going concern audit opinion. Descriptive analysis also prove that Altman prediction for grey area and secure area are really good in predict auditor’s opinion but not really good in Altman prediction for bankruptcy area.
Highlights
Financial report is the main source of information to all parties who have interests in a company [15]
The test results H0 using logistic regression for each year can be seen in Table 3 below:
The conclusion that can be drawn from this study is that there is a negative significant effect between the model predictions Altman against going concern audit opinion
Summary
Financial report is the main source of information to all parties who have interests in a company [15]. [1] stated that through financial report, we can get a picture on the life of a company, whether it is in a good condition or it has a tendency to go bankrupt. In order for the financial statements that have been made by the company to be trustworthy and reliable, the auditor is required to play in bridging the interests of users and providers of financial report [20]. Besides having responsibility to assess whether there is any doubt greatly to his opinions on the financial report, based on auditor’s regulations, auditor is required to provide an opinion regarding the company's ability to survive (going concern) in period of not more than one year from the date of the audit report [8]. Companies that get a going concern audit opinion have indications cannot continue their business sustainability
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