INVESTOR RESPONSE TO AUDITORS GOING CONCERN OPINION

The collapse of well-established corporations around the world during period 2000 to 2002 reopened the debate about the auditors’ responsibility (Haron, et al., 2009; Herbohn, et al., 2007) and this increased tension led the auditors being subject to high level of scrutiny by the media, public and regulators (Careya, et al., 2012; Fargher & Jiang, 2008). Some argued that auditors have a duty to signal the external parties regarding the impending collapse of the business. Mostly regulators, politicians and the media have often criticized auditors for not flagging the users of the financial statements about the impending client failures (Carey, et al., 2008).