The effect of business continuity, debt default, and profitability on the acceptance of a going concern audit opinion

Abstract

Purpose: This study aims to explore the effect of factors such as going concern, debt default, and profitability on Going Concern audit opinion acceptance.

Methods: The research used is a quantitative method. The type of quantitative data in the form of secondary data is obtained by accessing the website www.idx.co.id. The sample was determined by purposive sampling method with a population of 171 manufacturing companies listed on the Indonesia Stock Exchange and a research sample of 49 companies.

Findings: The results showed that: 1) Business continuity proxied by Net Profit Margin affects the acceptance of Going Concern audit opinion; 2) Debt default proxied by Debt to Equity Ratio also affects the acceptance of Going Concern audit opinion; 3) Profitability proxied by Return on Assets affects the acceptance of Going Concern audit opinion; and 4) Simultaneously, business continuity, debt default, and profitability affect the acceptance of Going Concern audit opinion.

Practical Implications: This study highlights the importance of company management in increasing Net Profit Margin, managing Debt to Equity Ratio, and maintaining a high Return on Assets. These measures help ensure business continuity, reduce default risk, and increase auditor and stakeholder confidence, ultimately strengthening the company's position in the market.