THE EFFECT OF FINANCIAL CONDITIONS AND COMPANY SIZE ON THE GOING CONCERN AUDIT OPINION

Abstract

This study aims to analyze the effect of financial condition and company size on going concern audit opinion. For the measurement proxy, the independent variable of the study, namely the company's financial condition, is measured by the Revised Altman Z-Score Model, while for company size it is measured by the natural logarithm of total assets. As for the dependent variable of the study, namely the going concern audit opinion measured by a dummy variable based on the financial statements presented by the company in accordance with the disclosure of a going concern audit opinion. The number of observations in this study were 245 observations taken from 49 companies in the mining sector with five years of observation. The sampling technique used was the purposive sampling method by taking samples from S&P Capital IQ for financial data for 2017-2021 which were then processed using STATA ver. 17. The result is empirical evidence that financial conditions have a negative effect on going-concern audit opinions, while company size has a positive effect on going-concern audit opinions. For the control variable, only auditor affiliation has an effect on going concern audit opinion with a negative relationship.