Kauser, Taffler and Tan (2009) document a going-concern market anomaly in the U.S., resulting in a sizable downward drift over the subsequent one-year period for first-time going-concern recipients. The authors argue that adverse signals regarding viability are not being impounded appropriately...

The purpose of this paper is to examine whether institutional investors: 1) anticipate a distressed firm's receipt of a first-time going concern modified audit opinion, and 2) react to a first-time going concern modified opinion by engaging in abnormal net selling of firm shares. Using a...