The Degree of Auditor’s Compliance to the International Standard on Auditing (ISA) No. (570) "Going Concern" and its Effect on Predicting the Financial failure of Jordanian Companies

قندوس, رامي (2017) The Degree of Auditor’s Compliance to the International Standard on Auditing (ISA) No. (570) "Going Concern" and its Effect on Predicting the Financial failure of Jordanian Companies. Masters thesis, جامعة الشرق الاوسط.

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Abstract

This study aims at investigating the extent to which the certified public accountants in Jordan comply with the International Standard Auditing ISA 570 “Going Concern” and the impact of this compliance on the ability to predict the financial failure in Jordanian industrial companies. The study population consists of all Jordanian industrial public shareholding companies listed on Amman Stock Exchange. To achieve the study objectives, a questionnaire is designed to collect data and it is distributed to the employees and managers of financial departments in (27) industrial failed companies according to the study of (Alrifaei, 2017). The study sample includes 81 employees and managers of financial departments in industrial failed companies and whom are selected for the purposes of distributing the questionnaire on them as a comprehensive sample. The researcher was able to retrieve (74) answered questionnaire. (6) Questionnaires were unconsidered due to the lack of seriousness by the respondents when filling out the questionnaire sections. Thus, the final sample of the study is represented by (68) questionnaire. Descriptive statistical methods are used including arithmetic means and standard deviation. Moreover, Cronbach Alpha test is used to verify the internal consistency of the questionnaire and ensure its validity, in addition to data validation tests for statistical analysis. In order to test the study hypotheses, the researcher used the multiple regression analysis models. The study results show that there is a statisticall significant impact of the degree of compliance of certified public accountants with the International Standard Auditing ISA 570 “Going Concern” through detecting the failure risks (financial, operational, and others), both collectively and separately, on the prediction of financial failure of س Jordanian industrial public shareholding companies. The study recommends that certified public accountants in Jordan should exert professional efforts enabling them to provide the correct and proper report in case of having an uncertainty pertaining to the company's ability to going concern, in addition to the importance of keeping Jordanian auditors continuously informed of all International Financial Reporting Standards IFRS and International Standards Auditing ISA issued by professional organizations by enabling them to access sites of professional organizations such as (IFAC, IFRS) and continuing training and learning for all new standards as this will have a great impact on their performance as well as on the improvement of the audit process. Key words: Going concern, prediction of financial failure, auditors.

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