Bank officers’ perceptions and uses of qualified audit reports
Qualitative Research in Accounting & Management
ISSN: 1176-6093
Article publication date: 23 September 2014
Abstract
Purpose
The purpose of this study is to provide insights into the perceptions and uses of qualified audit reports in financial statements of small- and medium-sized enterprises (SMEs). As there is a long-standing debate on the usefulness of auditor’s going-concern reports, this study aims to provide insights into the factors that affect how banks perceive and use going-concern reports.
Design/methodology/approach
Semi-structured interviews with bank officers were conducted.
Findings
The study findings demonstrated that bank officers considered that the going-concern report provided information, although they did not regard the information as being particularly useful. The main factors affecting the usefulness of information are use of other information sources and bank officers’ perceptions of auditing. Other factors are also presented and discussed in the current research paper.
Practical implications
Regulators have taken the action to improve the auditor’s reporting model, and the findings provided by this study are important because they provide a deeper understanding of the perceptions and uses of audit reports from smaller companies. The study also contributes knowledge about the role of audit reports in the context of SMEs finance.
Originality/value
This is one of the first studies to use a qualitative approach to examine factors that affect the use of going-concern reports.
Keywords
Acknowledgements
The author is grateful to the respondents who participated in the interviews. The author appreciates helpful comments and suggestions by discussant Stuart Turley and the conference participants at the EARNet Auditing Symposium in Bergen, 2011. The author would also like to thank the Editor, Deryl Northcott, the two anonymous reviewers, Thomas Carrington, Anne Loft, Reiner Quick and Thomas R. Johansen for their helpful discussions and comments.
Citation
Sormunen, N. (2014), "Bank officers’ perceptions and uses of qualified audit reports", Qualitative Research in Accounting & Management, Vol. 11 No. 3, pp. 215-237. https://doi.org/10.1108/QRAM-04-2012-0013
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited