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Audit reports of financially distressed companies: emphasis of matter (EOM) versus disclaimers


Ismail, Hashanah and Mustapha, Mazlina (2013) Audit reports of financially distressed companies: emphasis of matter (EOM) versus disclaimers. Journal of Modern Accounting and Auditing, 9 (5). pp. 634-640. ISSN 1548-6583; ESSN: 1935-9683


This paper examines audit reports issued to 39 Malaysian listed companies in financial distress categorized as Practice Note 17 (PN17) companies by Bursa Malaysia. The study finds that for companies which experienced financial distress, the audit reports are not similar, despite all companies are similarly troubled financially. Companies receive either a disclaimer or an emphasis of matter (EOM) report. The study finds that which of the two reports is given is associated with three variables: current-year operating loss, shareholders’ deficit, and default status, implying that audit reports do convey information that financial distress is not of the same level and severity among PN17 companies.

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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Publisher: David Publishing
Keywords: Financial distress; Emphasis of matter (EOM) audit report; Disclaimers; Practice Note 17 (PN17) companies; International Standard on Auditing (ISA) 570
Depositing User: Umikalthom Abdullah
Date Deposited: 07 Apr 2015 02:58
Last Modified: 21 Sep 2015 04:31
URI: http://psasir.upm.edu.my/id/eprint/30837
Statistic Details: View Download Statistic

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