The Effect of Leverage and Dividend Policy on Going Concern Audit Opinion

Abstract

Purpose – This study aims to examine the effect of leverage and dividend policy on the probability of receiving a going concern audit opinion in consumer non-cyclical companies listed on the Indonesia Stock Exchange during the post-pandemic recovery period (2022–2024).

Design/methodology/approach – This study employs a quantitative research design using logistic regression analysis. The sample consists of 72 firm-year observations from consumer non-cyclical sector companies selected through purposive sampling. Leverage is proxied by the Debt-to-Equity Ratio (DER), dividend policy by the Dividend Payout Ratio (DPR), and the going concern audit opinion is measured as a dummy variable. Data analysis is conducted using EViews 9.

Findings – The results indicate that leverage has a negative and statistically significant effect on the going concern audit opinion (β = −1.024; p = 0.025), suggesting that higher leverage reduces the likelihood of receiving a going concern modification. Dividend policy also shows a negative and statistically significant effect (β = −5.423; p = 0.040), indicating that dividend payments function as a credible financial signal that lowers auditor doubt regarding business continuity.

Research limitations/implications – The study is limited to the consumer non-cyclical sector and a specific timeframe (2022-2024). It suggests that auditors and regulators should focus on leverage and dividend signals when assessing business continuity.

JEL : G32, G11, M41