Going concern audit opinions: Bankruptcy risk, opinion shopping, and governance in Southeast Asia

Download This Article

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This research investigates the impact of bankruptcy risk and opinion shopping practices on issuing going concern audit opinions. Additionally, it delves into the role of corporate governance mechanism in moderating the associations between bankruptcy risk, opinion shopping practices, and the issuance of going concern audit opinions. This study uses logistic regression on 400 firm-year observations from the property, real estate, and construction sectors across five Association of Southeast Asian Nations (ASEAN) countries (2018–2022). The results of this study indicate that both bankruptcy risk (Ivanova et al., 2024) and the practice of opinion shopping (Widhyastuti & Mariani, 2025) positively influence the likelihood of receiving going concern audit opinions. Furthermore, this research reveals that corporate governance mechanism strengthens the connection between opinion shopping practices and issuing a going concern audit opinion (Hidayah & Rachmadiyana, 2024). However, it is worth noting that corporate governance mechanisms do not moderate the relationship between bankruptcy risk and the likelihood of receiving going concern audit opinions (Islamiati et al., 2021). Based on these findings, it is recommended that firms enhance governance structures, particularly in monitoring management behavior, to reduce opportunistic practices and improve audit credibility, thereby strengthening investor confidence in financially vulnerable sectors.

Keywords: Bankruptcy Risk, Opinion Shopping, Corporate Governance Mechanism, Institutional Ownership, Going Concern Audit Opinions

Authors’ individual contribution: Conceptualization — T.S. and H.A.R.R.B.; Methodology — T.S. and H.A.R.R.B.; Validation — T.S.; Formal Analysis — T.S. and H.A.R.R.B.; Investigation — T.S. and H.A.R.R.B.; Resources — T.S. and H.A.R.R.B.; Data Curation — T.S. and H.A.R.R.B.; Writing — Original Draft — T.S. and H.A.R.R.B.; Writing — Review & Editing — T.S. and H.A.R.R.B.; Visualization — T.S. and H.A.R.R.B.; Supervision — T.S; Project Administration — T.S. and H.A.R.R.B.; Funding Acquisition —T.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G32, G33, G34, M41, M42

Received: 24.07.2025
Revised: 01.10.2025; 11.12.2025
Accepted: 23.12.2025
Published online: 24.12.2025

How to cite this paper: Sihombing, T., & Boli, H. A. R. R. (2026). Going concern audit opinions: Bankruptcy risk, opinion shopping, and governance in Southeast Asia. Risk Governance and Control: Financial Markets & Institutions, 16(1), 8–19. https://doi.org/10.22495/rgcv16i1p1