Going-Concern Audit Opinion and Firm-Specific Expertise of Outsourced IAF Providers: Empirical Evidence from an Emerging Market

Objective and interest of the work: This study examines the effect of firm-specific expertise of outsourced IAF providers on going-concern audit opinion. Design of the methodology: Based on the agency theoretical background as well as relevant studies from the audit literature, the study’s hypothesis is developed and tested by probit regression to analyse the data of 1,071 firm-year observations listed on the Omani capital market over the period 2006-2019. Results: The result is consistent with the hypothesis that Omani public listed companies with greater reliance on the outsourced IAF providers who have sufficient firm-specific expertise are less likely to receive a going-concern audit opinion. Practical implications: The current study reinforces theoretical and practical implications for regulators, auditors, shareholders and decision makers by providing the first empirical evidence on the relationship between the firm-specific expertise of outsourced IAF providers and going-concern audit opinion, in an Asian emerging market, specifically Omani, context.