Aligning Disclosure Requirements for Managerial Assessments of Going Concern Risk: Initial Evidence From New Zealand

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aut.relation.endpage1547
aut.relation.issue2
aut.relation.journalAccounting & Finance
aut.relation.startpage1525
aut.relation.volume64
dc.contributor.authorGrosse, Matthew
dc.contributor.authorScott, Tom
dc.contributor.authorZang, Zeting
dc.date.accessioned2024-06-24T03:55:31Z
dc.date.available2024-06-24T03:55:31Z
dc.date.issued2023-10-20
dc.description.abstractThis study examines the impact of the Financial Reporting Standard No. 44 New Zealand Additional Disclosures (FRS 44) amendment issued by the New Zealand Accounting Standards Board (NZASB). The FRS 44 amendment aligned disclosure requirements for managerial assessments of going concern risk in financial reports with auditing standards for periods ending on or after 30 September 2020. We first present descriptive evidence on the frequency of going concern opinions (GCO), frequency of going concern issues identified as key audit matters (GCKAM), and frequency and content of managerial assessments of going concern risk (GCMA) before and after the FRS 44 amendment. Second, we show lower audit fees and shorter audit lags for financially distressed companies post-FRS 44 implementation. This suggests that the harmonisation of accounting and auditing disclosure requirements alleviates tension during the going concern decision-making process for affected companies, subsequently leading to reduced audit fees.
dc.identifier.citationAccounting & Finance, ISSN: 0810-5391 (Print); 1467-629X (Online), Wiley, 64(2), 1525-1547. doi: 10.1111/acfi.13188
dc.identifier.doi10.1111/acfi.13188
dc.identifier.issn0810-5391
dc.identifier.issn1467-629X
dc.identifier.urihttp://hdl.handle.net/10292/17694
dc.languageen
dc.publisherWiley
dc.relation.urihttps://onlinelibrary.wiley.com/doi/10.1111/acfi.13188
dc.rights© 2023 The Authors. Accounting & Finance published by John Wiley & Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
dc.rights.accessrightsOpenAccess
dc.rights.urihttp://creativecommons.org/licenses/by/4.0/
dc.subject3501 Accounting, Auditing and Accountability
dc.subject3502 Banking, Finance and Investment
dc.subject35 Commerce, Management, Tourism and Services
dc.subject3507 Strategy, Management and Organisational Behaviour
dc.subject1402 Applied Economics
dc.subject1501 Accounting, Auditing and Accountability
dc.subject1502 Banking, Finance and Investment
dc.subjectAccounting
dc.subject3501 Accounting, auditing and accountability
dc.subject3502 Banking, finance and investment
dc.subject3801 Applied economics
dc.titleAligning Disclosure Requirements for Managerial Assessments of Going Concern Risk: Initial Evidence From New Zealand
dc.typeJournal Article
pubs.elements-id527273
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