The Relationship Between the Reputation of Audit Offices and the Accuracy of the Opinion on Continuity and the Extent to Which it is Affected by the Financial Failure Field Research in the Iraqi Stock Exchange

Ala Alddin Abdulwahab Al  Sabti; Majid Ahmed AL  Anssari

doi:10.26668/businessreview/2022.v7i2.425

Authors

Ala Alddin Abdulwahab Al Sabti Shatt Alarab University College, Basrah – Iraq https://orcid.org/0000-0003-4416-2354
Majid Ahmed AL Anssari Shatt Alarab University College, Basrah – Iraq https://orcid.org/0000-0002-3925-1937

DOI:

https://doi.org/10.26668/businessreview/2022.v7i2.425

Keywords:

Reputation of the Auditor's Office, Accuracy of the Auditor's Opinion on Business Continuity, Financial Failure

Abstract

Purposes: The purpose of the research is to test the relationship between the reputation of the auditor's office and the accuracy of his opinion on continuity and the impact of that relationship on the financial failure of the client company.

Theoretical framework: Studying the impact of the financial failure of the client company as an intermediate variable. Where some control variables are included, these were addressed through previous studies through a sample of companies listed on the Iraqi stock market (2017-2020) based on the binary logistic regression model to test the research hypotheses.

Methodology/ Design Approach: Relying on the binary logistic regression model to test and conducting additional analysis to test the research hypotheses.

Results: The results of the research indicated that there is a positive and significant impact of the reputation of the audit firms on the accuracy of their opinion on the continuity hypothesis, as well as the positive impact of the accuracy of the opinion of the Supreme Audit Bureau in the supervision of the auditors of the Bureau, and there is a positive and important impact of the variable of financial default as an intermediary variable between reputation the auditor's office and the accuracy of his opinion on continuity. Finally, the results of the analysis support the positive correlation of the effect of financial failure as a control variable on the accuracy of his opinion on going concern.

Research and practical and social effects: The social effects of research appear by studying the reputation of the auditor and its impact on the continuity or failure of companies listed in the Iraqi Stock Exchange.

The value of originality: The research represents a qualitative addition to the research that examined the auditor’s reputation variables and their impact on the continuity of companies.

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