Going concern: Analyse af påtegningsadfærden på konkursramte selskaber i perioden 1. juni 2009- 30. september 2009

Henriette Falk Jørgensen & Allan Breiling

Student thesis: Master thesis


This thesis addresses auditors' endorsement conduct in connection with a going concern of bankrupt companies. We have analyzed if the auditor by providing endorsements with modifications on a going concern meets regulation requirements, including the quality of submitted modified endorsements on a going concern. This topic has been selected as Denmark, due to the financial crisis, has seen a large increase in the number of bankrupt companies. We have therefore found it interesting to investigate whether the auditor's work is organized in a way allowing the auditor to identify those companies which cannot be regarded as a going concern. The analysis deals with and compares the different categories of auditors. The analysis distinguishes between state authorized public accountants and registered accountants. State authorized public accountants are furthermore divided into: four major and other state authorized public accountants. Our analysis is based on 291 companies that have gone bankrupt between 1 June 2009 - 30 September 2009. We have only included companies which have gone bankrupt within 12 months after the latest balance sheet day. The data base for the analysis in this thesis has particularly been the Danish Act on Registered and State Authorized Public Accountants (Act No. 468 of 17 June 2008), the Declaration Order (BEK No. 668 of 26 June 2008) and Danish Auditing Standards. Our analysis can be divided into two broad analyses. The first analysis addresses whether auditors provide modified endorsements in cases where regulation expects it. The second part of the analysis is based on whether auditors in cases with modified endorsements have provided these according to the quality requirements provided by the regulation. Based on our analysis, we can conclude that there should have been given significantly more modified endorsements on a going concern than has been the case. We also found that registered accountants are significantly poorer at providing modified endorsements on a going concern than state authorized public accountants. We have overall concluded that there is room for improving the quality of endorsements for gong concern. Our analysis has shown significant differences between the different categories of auditors. The four large state authorized accounting firms are in all areas doing significantly better than the industry in general. Other state authorized public accountants make more errors than the four large firms, but are better than registered auditors who clearly make the most errors in all aspects of the analysis. Generally we found significantly more errors than was expected.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2010
Number of pages140