Abstract

http://ssrn.com/abstract=1664727
 
 

References (53)



 
 

Citations (1)



 


 



The Impact of Religion on the Going Concern Reporting Decisions of Local Audit Practice Offices


Thomas C. Omer


University of Nebraska at Lincoln - School of Accountancy

Nathan Y. Sharp


Texas A&M University - Department of Accounting

Dechun Wang


Texas A&M University

April 2013


Abstract:     
We extend research on the effects of local audit practice office characteristics on audit quality by investigating whether audit offices in highly religious U.S. Metropolitan Statistical Areas (MSAs) exhibit going concern decisions that are systematically different from audit offices in less religious MSAs. Prior research links religiosity to risk aversion and suggests audit practice offices in more religious MSAs could be more likely to resist client pressure to withhold going concern opinions because of aversion to litigation risk. However, prior research also indicates that religion is an important element of social identity; therefore, audit offices in more religious areas may be more likely to acquiesce to a client-preferred position if religion creates social connections between auditors and their clients or helps auditors better identify with their clients. Our results indicate that audit practice offices located in highly religious MSAs are more likely to issue going concern audit opinions. Additional tests suggest that the impact of religiosity on auditors’ going concern decisions is concentrated among non-Big 4 auditors. In addition, we find that audit practice offices in highly religious MSAs issue going concern reports with greater bankruptcy prediction accuracy.

Number of Pages in PDF File: 45

Keywords: going concern opinions, audit quality, religion, social identity

JEL Classification: M41, M42, Z12

working papers series


Download This Paper

Date posted: August 24, 2010 ; Last revised: April 26, 2013

Suggested Citation

Omer, Thomas C. and Sharp, Nathan Y. and Wang, Dechun, The Impact of Religion on the Going Concern Reporting Decisions of Local Audit Practice Offices (April 2013). Available at SSRN: http://ssrn.com/abstract=1664727 or http://dx.doi.org/10.2139/ssrn.1664727

Contact Information

Thomas C. Omer
University of Nebraska at Lincoln - School of Accountancy ( email )
307 College of Business Administration
Lincoln, NE 68588-0488
United States
Nathan Y. Sharp
Texas A&M University (TAMU) - Department of Accounting ( email )
430 Wehner
College Station, TX 77843-4353
United States
979-845-0338 (Phone)

Dechun Wang (Contact Author)
Texas A&M University ( email )
430 Wehner
College Station, TX 77843-4353
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,349
Downloads: 392
Download Rank: 39,712
References:  53
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.344 seconds