Search
Program Calendar
Browse By Day
Search Tips
Virtual Exhibit Hall
Personal Schedule
Sign In
The recent financial crisis and recession had a devastating effect on families and businesses around the world. This study looks at the effects of the recent financial crisis on auditors’ going-concern audit opinions. We find that not only did the number of distressed companies and the number of going-concern opinions increase during the financial crisis, but also auditors became more conservative toward distressed companies in the form of issuing a higher percentage of going-concern opinions to those companies. Even for the same level of financial ratios and bankruptcy predictors, auditors increased their likelihood of issuing going-concern opinions. This increased conservatism was very evident in 2008, but the level of conservatism had returned to normal by 2010.