Please use this identifier to cite or link to this item:
Full metadata record
DC FieldValueLanguage
dc.description.abstractPurpose: The purpose of this study is to analyze the recent actions being exercised by Maltese audit practitioners when reporting on companies having going concern problems. The study seeks to ascertain and distinguish between the different types of opinions issued by auditors in such situations, and to understand the reasons behind each and every one of them. The study also intends to assess the implications of these different types of opinions to financial institutions as the main users. Design: The objectives of this study were achieved by means of a quantitative research conducted at the registry of companies, together with a number of semi-structured interviews with a number of Maltese audit practitioners. A further two semi-structured interviews were conducted with bankers' representatives from two major banks in Malta. Findings: The study reveals that locally, very few going concern qualifications are issued. Instead, there seems to be a marked tendency towards the inclusion of an emphasis of matter paragraph in the auditor's report to highlight material uncertainties disclosed in the financial statements. Furthermore, the study observes that local audit practitioners adopt different approaches in evaluating an entity's ability to continue operating as a going concern. For example, auditors differ on the length of period which should be covered by a going concern assessment. These varying approaches may be affecting the way going concern uncertainties are reported, which is not always in line with the auditing standard. Banks assess the going concern status of their clients by analyzing cash flows, both current and projected. The audit report only provides confirmation that a client company is facing difficulties in continuing its operations. Conclusion: The This implies that companies do actually iv disclose events and conditions which are endangering their lives. However, the fact that some companies' audit report keeps featuring an emphasis of matter paragraph on an annual basis raises serious doubts on whether local auditors are seriously reviewing the cash flow projections and the mitigating factors presented by management. The study also establishes that the main concern of banks is clients' present and future cash flows. The audit report tends to be a supplementary evidence, rather than conclusive evidence, of the uncertainties threatening the continued existence of client companies. Value It is sincerely hoped that the study will increase auditors' awareness about the importance of reviewing the going concern of the companies being audited. Given the serious implications that a failing company can have on other parties, the study proposes the introduction of a separate, forward looking report, which can increase the effectiveness of going concern reporting.en_GB
dc.subjectAuditing -- Maltaen_GB
dc.subjectGoing concern (Accounting)en_GB
dc.titleRecent trends in the going concern qualification in Malta : an assessmenten_GB
dc.rights.holderThe copyright of this work belongs to the author(s)/publisher. The rights of this work are as defined by the appropriate Copyright Legislation or as modified by any successive legislation. Users may access this work and can make use of the information contained in accordance with the Copyright Legislation provided that the author must be properly acknowledged. Further distribution or reproduction in any format is prohibited without the prior permission of the copyright holder.en_GB
dc.publisher.institutionUniversity of Maltaen_GB
dc.publisher.departmentFaculty of Economics, Management & Accountancy. Department of Accountancyen_GB
dc.contributor.creatorVella, Nicholas-
Appears in Collections:Dissertations - FacEMAAcc - 2011

Files in This Item:
File Description SizeFormat 
  Restricted Access
1.57 MBAdobe PDFView/Open Request a copy

Items in OAR@UM are protected by copyright, with all rights reserved, unless otherwise indicated.