The impact of political pressure on novice decision makers: Are auditors qualified to make going concern judgements?

Abstract

Over the past decade, the public accountancy profession has been the subject of broad criticism for its failure to adequately prepare third parties for the impending failure of client organizations. Many potential causes of auditors' failure to issue opinions reflecting client organization's ability to remain a going concern have been put forth, including primarily poor judgement and/or client pressures to issue a clean opinion. In this paper, we argue that the uncertainty in the decision-making process may be compounded by a relatively low level of knowledge, making the auditor's end decision more susceptible to socio-political pressure. The paper is divided into five sections. The introduc..