41 clients ability to continue its business going concern. The terms
contained in SAS No. 59 is as follows: 1. The auditors responsibility is to evaluate whether the entity
going concern for a period of not more than a year from the date of the audited financial statements.
2. The Auditor is not responsible for predict or forecast of future events.
3. The bankruptcy by a company that did not receive reports going concern, although one year from the balance sheet date,
does not require the auditor of insufficient performance. 4. The auditor does not have to carry out a specific procedure to
determine the going concern entity. Audit procedures for audit purposes the other considered sufficient.
5. The auditor is required to evaluate managements plan to reduce the incidence and circumstances that indicate
considerable doubt of the companys going concern. 6. If the auditor concludes that there is doubt, the auditor should
consider the effect of financial reporting and disclosure, to determine the impact of the audit opinion.
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5. Leverage
Harahap 2010 suggested that leverage describes the relationship between the companys debt to equity and assets. This
ratio measures how much the company was financed by debt or creditors with the ability of the company described by capital. A
good company should have a larger capital composition of the debt. However, the companys funding obtained largely through
debt can improve enterprise performance due to faster turnover company.
The leverage ratio which used for this research is the Total Liability to Total Assets. This ratio shows the ratio between debt
and equity capital in the funding of the company and demonstrates the ability of the companys capital to cover the entire
debt. The lower Leverage of the company, it’s mean the better
condition of the company. Leverage formula is as follows:
Leverage =
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6. Previous Year Audit Opinion
The audit opinion previous years is the audit opinion that auditee received in the previous year or one year before the
research of the independent auditor. The audit opinion can be divided into 2 of the going concern audit opinion and non-going
concern audit opinion. Going concern audit opinion previous years can be considered
to reissue the auditors opinion on the audit next year. Mutchler 1984 states that the company which receiving going concern
audit opinion on the previous year were more likely to receive the same opinion in the current year. This is because when the
auditors give going concern audit opinion on the previous year, the company is is considered have problems in going concern so that
auditors tend to give a going concern audit opinion back in the current year.
