Affiliation:
1. University of Technology Sydney Senior Lecturer UTS Business School P.O. Box 123 Broadway AUSTRALIA Sydney NSW 2007 +61 2 9514 3686.
2. Auckland University of Technology
Abstract
This paper examines the information content of interim review assurance in the Australian mandatory disclosure setting. First, we find a strong negative market reaction to interim going concern conclusions (IGCC) contained in the review of interim financial statements. Second, we find no significant difference between the market reaction to IGCCs and annual going concern opinions (AGCO) received at the annual report audit. Finally, we show IGCCs are significant predictors of subsequent AGCOs, and provide incremental information from the previous annual report audit opinion. Overall, these results contribute to the literature on the benefits of mandatory interim assurance by showing that going concern conclusions contained in interim financial statements provide investors with new and relevant information.
Publisher
American Accounting Association
Subject
Economics and Econometrics,Finance,Accounting
Cited by
3 articles.
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