Financial and non-financial signals in going concern audit opinions: evidence from indonesian energy companies

Abstract

Purpose: This study aims to examine the effect of financial distress, intellectual capital, and company growth on going concern audit opinions among energy sector companies listed on the Indonesia Stock Exchange during the 2020-2024 period. Methodology/approach: This study employed a quantitative approach using secondary data from annual reports and independent auditors’ reports. A total of 155 firm-year observations were analyzed using logistic regression. Findings: The results indicate that financial distress has a significant negative effect on going concern audit opinions. Furthermore, intellectual capital and company growth have no significant effect on going concern audit opinions. Practical and Theoritical contribution/Originality: This study provides practical implications for auditors and company management in evaluating business continuity by emphasizing the importance of financial condition in issuing going concern audit opinions. It also contributes to the literature by providing empirical evidence on the determinants of going concern audit opinions, particulary the role of intellectual capital in Indonesia’s energy sector. Research Limitation: This study is limited to energy sector companies listed on the Indonesia Stock Exchange during 2020-2024. In Addition, the analysis relies on specific proxies for financial distress and company growth and examines only three explanatory variables, while other factors that may affect going concern audit opinions are not included.