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Corporate Going Concern in Pandemic Situation: Evidence from Indonesia

24 Pages Posted: 31 Mar 2022 Publication Status: Published

See all articles by Fidiana Fidiana

Fidiana Fidiana

Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA) Surabaya

Prawita Yani

affiliation not provided to SSRN

Diah Hari Suryaningrum

Universitas Pembangunan Nasional Veteran Jawa Timur

Abstract

Going-concern (GC) explanation in audit report adds value and ensures that the firm's sustainability is secured. However, the literature suffers from a strict focus on financial power, with less attention to consider the situational condition of a pandemic as well as less emphasis on dividend policy. Moreover, financial and non-financial factors can affect GC positively or negatively. This study sheds light on this relationship of listed infrastructure, utilities, and transportation firms in Indonesia as the most affected firm by Covid-19. Data were collected from published audited annual reports and extracted from 73 firms as the sample. Logistic regression was employed to test the hypotheses. The results show the importance of leverage, audit quality, prior opinion, and dividend policy in ensuring corporate GC. Conversely, audit committee and institutional holder as one of the corporate governance indicators does not relate to GC explanations. Beyond its contribution to the literature, this study offers valuable feedback for regulatory bodies to consider the enforcement of corporate governance implementation and assists investors in making better-informed decisions. Furthermore, due to a pandemic crisis, a postponed dividend payment has not caused the firm to accept a GC explanatory decision.

Keywords: Going-concern, dividend policy, corporate governance, audit quality, pandemic

Suggested Citation

Fidiana, Fidiana and Yani, Prawita and Suryaningrum, Diah Hari, Corporate Going Concern in Pandemic Situation: Evidence from Indonesia. Available at SSRN: https://ssrn.com/abstract=4071633 or http://dx.doi.org/10.2139/ssrn.4071633

Fidiana Fidiana (Contact Author)

Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA) Surabaya ( email )

Jalan Menur Pumpungan
Indonesia

Prawita Yani

affiliation not provided to SSRN ( email )

No Address Available

Diah Hari Suryaningrum

Universitas Pembangunan Nasional Veteran Jawa Timur ( email )

Jl. Raya Rungkut Madya
Rungkuy
Surabaya, Jawa Timur 60293
Indonesia

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