Going concern opinions and the market's reaction to bankruptcy filings

• 成果类型: Article
• 署名作者: Chen, KCW; Church, BK
• 署名单位: Wilfrid Laurier University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• 发表日期: 1996
• 页码: 117-128
• 关键词: QUALIFIED AUDIT OPINIONS; stock returns; INFORMATION; DISCLOSURES; FIRMS

摘要

This study investigates the association between going concern opinions and the market's reaction to bankruptcy filings. The results of prior studies indicate that going concern opinions are useful in predicting bankruptcy and provide some explanatory power in predicting bankruptcy resolution, As such, going concern opinions may reduce the surprise associated with bankruptcy. Our results are consistent with this assertion. Firms receiving going concern opinions experience less negative excess returns in the period surrounding bankruptcy filings than those receiving unqualified opinions, These results hold after controlling for the probability of bankruptcy, the market's reaction to news announcements occurring prior to bankruptcy, and changes in stock price prior to the issuance of the auditor's report. Overall, our results are consistent with going concern opinions having information value.