Possible Impact of the Latest International Standard of Auditing 570 on the Rate of Going Concern Opinion Issuance in Malaysia

Auditors are required to issue going concern opinion (GC opinion) to companies that are incapable to continue their operations in the near future. It is very important for auditors to issue the GC opinion properly because such opinion is the only signal from them on the viability of a company. Investors need such signal before they can make good investment decisions. In Malaysia and many other countries however, auditors do not want to issue GC opinion to a very large percentage of financially distressed companies. This motivates this paper to discuss the impact of the latest International Standard of Auditing 2016 (ISA 570 2016) on GC opinion issuance rate . Overall, we are in the opinion that there is no strong ground to expect the new ISA 570 (2016) to reduce the problem of Malaysian auditors do not issue the GC opinion to many financially distressed companies. This is due to no new stricter measures being introduced in the latest auditing standard. Nonetheless, we propose four actions that can be taken by policy makers and standard setters if they want to improve the rate and practice of GC opinion issuance