The Effect of Auditor Reputation and Audit Report Lag on the Issuance of Going Concern Audit Opinions in Manufacturing Companies

Abstract

This study investigates the influence of auditor reputation and audit report lag on the issuance of going concern audit opinions in manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2021–2023 period. Adopting a quantitative research approach, the study utilizes secondary data derived from audited financial statements. A total of 79 companies were selected as samples using purposive sampling techniques, ensuring relevance and consistency with the research objectives. The findings reveal that auditor reputation does not significantly affect the issuance of going concern audit opinions, as indicated by a significance value of 0.2185 (> 0.05). This suggests that both Big Four and non-Big Four public accounting firms (KAP) have equal opportunities to issue going concern opinions, regardless of their market standing or perceived credibility. In contrast, audit report lag demonstrates a significant impact, with a significance value of 0.0000 (< 0.05), indicating that longer audit completion times are associated with a higher likelihood of going concern opinion issuance. This implies that delays in audit reporting may reflect underlying financial or operational concerns that prompt auditors to issue cautionary opinions. Simultaneous testing of both variables shows a significant combined effect on going concern audit opinions, supported by an F-statistic probability value of 0.000000 (< 0.05). These results underscore the importance of audit timeliness as a critical factor in auditors’ professional judgment, while suggesting that reputation alone does not influence the decision to issue a going concern opinion. The study contributes to the literature on audit quality and financial reporting by highlighting audit report lag as a key determinant in going concern assessments. Future research is recommended to explore additional factors such as financial distress indicators, industry characteristics, and auditor-client relationships to deepen understanding of going concern opinion dynamics.