Going concern guidance for New Zealand auditors: transitions in communicative acts

Peursem, Karen A. Van; Locke, Joanne; Harnisch, Neil

doi:10.1016/j.cpa.2004.08.001

Cited by 11 publications

(15 citation statements)

References 23 publications

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“…Auditors appear to have a bias towards not qualifying failing clients, with typically 20-95 percent of bankrupt companies receiving unqualified audit reports (Geiger and Raghunandan, 2002;Van Peursem et al, 2005). Citron and Taffler (1992) show that only 20 percent of UK failed companies received going concern qualifications before being declared bankrupt.…”

Section: Implications Of Going Concern Misclassificationmentioning

confidence: 99%

Assessing going concern

Kuruppu

Laswad

Oyelere

2012

Pacific Accounting Review

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to ascertain the practical efficacy of statistical corporate failure models in improving auditors' going concern assessment. It also aims to examine auditors' perceptions of corporate failure models as an analytical procedure in this context. Design/methodology/approach -The paper utilises a survey questionnaire with a case study component to evaluate the practical value of corporate failure models for assessing going concern, and to examine auditors' perceptions of such models as an analytical procedure for assessing going concern. Findings -The results indicate that corporate failure models facilitate the formation of more appropriate going concern opinions and increase judgment consensus. Auditors perceive such models as useful in obtaining relevant evidential matter and in mitigating some of the subjectivity involved in assessing going concern. However, the results also indicate that corporate failure models are perceived to be more effective in the planning stages than at the final stages of the audit. Furthermore, auditors are seeking more explicit guidance in auditing standards on the use of corporate failure models for assessing going concern. Originality/value -The study extends previous research by examining the practical efficacy of corporate failure models for assisting auditors to assess going concern in light of human information processing limitations. Further, it examines auditors' perceptions of corporate failure models as an analytical procedure, and the guidance that auditors seek on the use of such models in auditing standards.

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Section: Implications Of Going Concern Misclassificationmentioning

confidence: 99%

Assessing going concern

Kuruppu

Laswad

Oyelere

2012

Pacific Accounting Review

View full text Add to dashboard Cite

show abstract

“…On the other hand, some authors (Willekens et al, 1996) considered the issuing of audit standards and guidance statements as a form of self-regulation at a time when the accounting professional monopoly on regulation is being threatened. However, van Peursem et al (2005) indicated that the accountancy professions create a manner of 'self' through their standards. Therefore, in communicating its professional view on environmental matters and accountability, the accountancy profession could be said to be creating a manner of 'self' through AGS-1010, (refer section 3.2.2).…”

Section: Figure 4: the Expectation Gap II (The Expectation Gap Betweementioning

confidence: 99%

“…The literature indicated a general tendency for authors to focus on the following four components of audit methodology: (1) the business risk approach (BRA) to auditing (Bell et al, 1997;Gay, 2002;Gray & Manson, 2005;Knechel, 2007); (2) professional judgement on materiality (Bell et al, 1997;Iskandar, 1996;Messier Jr. et al, 2005); (3) the application of auditing (Chandler, 1997;Humphrey & Moizer, 1990;van Peursem et al, 2005) and accounting standards (Bell, 1992;Collier et al, 1993 August;Munter & Sacasas, 1996;Specht, 1992); and (4) relying on the work of an expert (Colbert & Scarbrough, 1993;Power, 1997). The following sections are structured according to each of these four components.…”

Section: Common Audit Approaches and Practices In Auditing Environmenmentioning

confidence: 99%

“…Since the accountancy profession has a stated obligation to serve the public interest (ICANZ, 2003a), van Peursem et al (2005) expected to see that obligation played out throughout the 'Going Concern' audit standard they examined. Instead they found that the audit standard did not convey a forceful mandate and did not seem to impose any requirements on the auditor, indicating that the 'expanded' standards "give the appearance of improving professional benchmarks by virtue of greater volume, a volume not necessarily commensurate with a greater quality or a more forceful mandate" (van Peursem et al, 2005, p. 128).…”

Section: The Application Of Audit Standards and Audit Guidance Statemmentioning

confidence: 99%

“…According to van Peursem, Locke and Harnisch (2005), the accountancy profession creates a manner of 'self' and communicates about itself through standards made available to every auditor and the general public (refer to section 2.2.3). From the size of the document, it is obvious that a significant amount of time and effort was put into the discussion and writing of IAPS-1010 (internationally) which was later adopted in New Zealand as AGS-1010.…”

Section: A Legitimacy Theory Perspectivementioning

confidence: 99%

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