Abstract
This study investigates the contribution of financial and non-financial information to enhance the ability to discriminate between the choices of a qualified or unqualified (clean) audit report. The audit firms face the risk of losing the client if they issue a qualification. On the other hand, failing to qualify exposes the auditor to lawsuits and reputations loss. Financial statements, auditors’ opinions, and the notes to financial statements are examined for a sample of 100 firms. The auditors’ qualification decision is modelled using a multicriteria decision aid classification method (MHDIS-Multi-groupHierarchicalDIScrimination). A comparison with statistical techniques (linear discriminant analysis and logit analysis) is also performed. This study has implications for internal and external auditors and company decisions makers.
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Spathis, C., Doumpos, M. & Zopounidis, C. A multicriteria discrimination approach to model qualified audit reports. Oper Res Int J 4, 347–355 (2004). https://doi.org/10.1007/BF02944151
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DOI: https://doi.org/10.1007/BF02944151