Altman’s financial distress model and auditor’s opinion on the going concern problem of listed companies on the Stock Exchange of Thailand
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Abstract
This research objective is to study the relationship between the financial status according to Altman’s financial distress model and auditor’s opinion on the going concern problem of listed companies on the Stock Exchange of Thailand. The data are collected from financial statements and auditors’ reports in 2020 which can be retrieved from The Securities Exchange Commission’s website. This study utilizes the purposive sampling and matched pair sample design. Specifically, the companies receiving auditor’s opinion on the going concern problems are matched with those having similar characteristics but receiving other types of auditor’s opinion. The number of samples is 44 firms in total. The main statistical analysis is Logistic Regression. The main result indicates that if the companies have high financial pressure or have high risk to go bankrupt (distress zone or low Z-Score), they will have potential to receive auditor’s opinion on the going concern problems. The financial distress under the Altman’s model is negatively related to the auditor’s report with the going concern’s problems. Moreover, the reliability of Altman’s model in this research represents the accuracy of forecasting at 90.90% which can be implied that the Altman’s model can be well used for forecasting the auditor’s opinion in Thailand.
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References
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