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BEHAVIORAL IMPLICATIONS OF ALTERNATIVE GOING CONCERN REPORTING FORMATS
Journal article

BEHAVIORAL IMPLICATIONS OF ALTERNATIVE GOING CONCERN REPORTING FORMATS

Chantal Viger, Asokan Anandarajan, Anthony P Curatola and Walid Ben-Amar
Advances in accounting behavioral research, v 7, pp 53-73
01 Jan 2004

Abstract

The generally accepted method of presentation with respect to going-concern reporting in a global context is to modify the auditor's report with an explanatory paragraph in addition to having a separate note to the financial statements. In Canada, however, the auditor's report is clean, and the going concern uncertainty is restricted to the endnotes. This research, using Canadian students as subjects and conducted as a between-subjects experiment, examines unsophisticated investor's behavior to the signal conveyed by different reporting formats by auditors (U.S. versus Canadian). The results indicate that the form of the auditor's report does significantly influence subjects' decisions to invest and their perception of risk.

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