Research On The Decision Usefulness Of Going-Concern Audit Opinion

Nowadays, uncertainty of going-concern is almost the norm of each enterprise, almost all enterprises are in the condition between going-concern and non going-concern. How to keep the condition of going-concern for a long time is what all enterprises are looking for. Once the going-concern assumption of an enterprise is not reasonable and the enterprise can’t keep operating, it will bring a huge loss to the external layer of the enterprise, such as the creditors and the investors:In recent years, due to the limited capacity of credit risk assessment and credit decision-making, the banking industry of our country often encounter the situation that the debtors’can’t repay because of their poor financial situation. When this situation occurs, there would be a huge risk to bank itself. So, in order to provide a theoretical guidance and empirical evidence to China’s commercial bank credit policy makers and other stakeholders, this paper chooses the topic of the going-concern audit opinion to make a close study of the decision usefulness of the going-concern audit opinion in China’s bank credit decision-making.The paper starts with a review of the basic theories upon bank credit decision-making and audit, the second part is a literature review of the studies on the decision usefulness of audit opinion in the stock market and the credit market. In the empirical research part, based on the theory above, this paper proposes its hypothesis and establish a multiple linear regression model to inspect them. The results of the empirical research indicate that, compared with companies with unqualified non going-concern audit opinion, companies with going-concern audit opinion are less able to obtain bank loans. The study also finds different types of going-concern audit opinion have different negative impact on listed companies to obtain bank loans. In addition, compared with the region with weak government intervention, the going-concern audit opinion has greater negative impact in the process of listed companies to obtain bank loans than the region with strong government intervention.The paper makes some innovations in the following aspects:First, this paper breaks through the limitation of previous research on the usefulness of the going-concern audit opinion decision that focus only on the stock market, choosing the perspective of the debtor-creditor relationship innovatively to research the role and impact of the going-concern audit opinion in bank credit decision-making. This makes a useful complement to previous studies and builds a more complete research framework of the decision usefulness of going-concern audit opinion.Second, in the process of empirical research, this paper makes a detailed inspection of the going-concern audit opinion, unqualified non going-concern audit opinion and different kinds of going-concern audit opinion in the process of bank credit decision-making and analyzes the impact that the going-concern audit opinion play in the process of bank credit decision-making in the different degree of government intervention. This series of studies are almost not carried on in previous literature, so this paper fills in the blank spots in the previous study.