Implications of Auditor Characteristics and Directors’ and Officers’ Liability Insurance for Going-Concern Audit Opinions: Evidence from Taiwan

  •  Hsiang-Tsai Chiang    
  •  Shu-Lin Lin    
  •  Li-Jen He    


This study explores the association among auditor characteristics, directors’ and officers’ (D&O) insurance, and auditors’ intention to issue going-concern opinions. For the insured decision, the results show that clients of auditors with greater market shares, better reputation (Big 4), and those that had been punished had higher D&O insurance coverage. For the results of audit opinion, the results show that the industry-specific experience of auditors and audit firm size are significantly negatively associated with the issuing of going-concern opinion. It is consistent with our expectations that since Big 4 auditors may share more litigation risk and possess more loss coverage of audit failure of D&O insurance, the effects of D&O insurance on auditors’ intention of issuing going-concern opinions are more significant for Big 4 auditors.

This work is licensed under a Creative Commons Attribution 4.0 License.