Research On The Going-concern Audit Judgment Under The Interaction Between Prophecy Effect Expectation And Responsibility

Enterprise bankruptcy is the biggest risk point to the investment, so the going concern audit has received extensive attention from the theoretical and professional circles. SASNO.59(AICPA,1988)requires the auditor to evaluate the company whether there is major matters result in substantial doubts about the ability to continue to operate in a reasonable periods (as an obligation). Since then, the going concern auditing judgment as a task, require auditors to take full account of the company's complex financial information, integrated positive evidence and negative evidence to make selective judgments (can continue to operate or can not continue to operate). But the Enron scandal and Lam shares bankruptcy cases have burst the question that from all investors:If the audit report can't provide accurate company bankrupt early warning information and that whether such a report is useful? And what is the reason why auditors do not issue the going-concern opinion?Previous studies on going concern audit judgment has proven that auditors have the ability to identify financially distressed companies, So the auditors don't issued the going-concern opinion is not because the auditor don't have sufficient professional competence to identify customer's continuing operation problems, but the auditor is limited by rational cognition or need to tradeoff the possible economic consequences of issued the going-concern opinion. Thus, going-concern audit judgment is not only influenced by cognitive factors, but also affected by the motivation factors.Based on the personality theory of Murray, using belief adjustment model, starting from the motivational factors which influence the auditor's going concern audit judgment, through the experiment and statistical methods to study the inner spontaneous motivation of self-fulfilling prophecy effect expectation, the external motivation of responsibility pressure and their interaction effects on going-concern audit judgment. And measure the influence degree by two dimensions of judging process and judging results.The study found that:Firstly, the high expectation level of self-fulfilling prophecy effect result in the auditor gives positive evidence more weight in continuous operation ability judgment task, and score higher on company's continuous operation ability. This shows that the self-fulfilling prophecy effect potentially affect its judgment on continuous operation ability. Secondly, responsibility pressure make the auditor's judgment process more cautious and neutral, consider more negative evidence, which can reduce cognitive biases and make an unbiased judgment. Thirdly, self-fulfilling prophecy effect expectation interact with responsibility pressure significantly, and the responsibility pressure can effectively restrain the negative impact of the self-fulfilling prophecy effects on audit judgment. Therefore, responsibility pressure should be further strengthened on auditors in Chinese practice environment to effectively suppress the adverse effects of self-fulfilling prophecy effect and improve the level of audit services and audit quality.