Determinants of Going Concern Audit Opinions in Manufacturing Companies: Empirical Evidence from Indonesia Arfan Ikhsan (a), Muhammad Rizal (a), Khairani Alawiyah Matondang (b)
a) Accounting Study Programme, Faculty of Economics, Universitas Negeri Medan
arfanikhsanlbs79[at]gmail.com
b) Economics Study Programme, Faculty of Economics, Universitas Negeri Medan
Abstract
This applied research investigates the determinants of going concern audit opinions in Indonesian manufacturing companies, emphasizing the role of internal auditors^ perceptions of audit quality and its impact on client satisfaction. Recognizing the growing concern over audit failures and unqualified opinions issued prior to corporate insolvencies, this study addresses critical audit quality dimensions and evaluates the moderating effect of the going concern opinion.
A quantitative explanatory approach was adopted using a structured questionnaire distributed to internal auditors of manufacturing firms listed on the Indonesia Stock Exchange (IDX). A total of 120 questionnaires were sent, and 59 valid responses were analyzed. The study employed Partial Least Squares Structural Equation Modeling (PLS-SEM) using SmartPLS 4.0 to assess the relationships between latent constructs and to test the interaction effects. The main constructs evaluated include audit experience, industry knowledge, accounting standards proficiency, audit team independence, professional skepticism, audit field execution, and ethical standards. Client satisfaction serves as the dependent variable, with the going concern audit opinion as a moderator.
The results indicate that five dimensions-audit experience, industry knowledge, audit team independence, audit field execution, and ethical standards-exert a positive and statistically significant effect on audit quality (path coefficients > 0.30- p < 0.05). In turn, audit quality significantly influences client satisfaction (β- = 0.637, t = 9.822, p < 0.001), demonstrating the importance of perceived audit effectiveness. The moderating effect of the going concern opinion is also significant (β- = 0.214, t = 2.446, p = 0.015), indicating that transparent disclosures regarding going concern status enhance the perceived value of the audit and client trust.
These findings confirm that audit quality is multidimensional and context-dependent, with ethical behavior and auditor independence playing a central role in shaping audit outcomes. The study contributes to the development of audit quality theory in emerging markets and provides practical implications for audit practitioners, regulatory bodies, and corporate governance frameworks in strengthening transparency and early warning mechanisms within financial reporting practices.
