Title: Do audit report disclosures significantly predict firm failure? The Ghanaian context

Authors: Newman Amaning; Reindolph Anim Osei; Robertson Amoah; Tahir Ahmed Andzei; Kwame Oduro Amoako; Edward Quansah

Addresses: Department of Accountancy, Sunyani Technical University, P.O. Box 206, Sunyani, Ghana ' Department of Accounting and Finance, Christian Service University College, P.O. Box 3110, Kumasi, Ghana ' Department of Accountancy, Sunyani Technical University, P.O. Box 206, Sunyani, Ghana ' Department of Business and Social Science Education, University of Cape Coast, University Post Office, Cape Coast, Ghana ' Department of Accountancy, Sunyani Technical University, P.O. Box 206, Sunyani, Ghana ' School of Business, University of Education, P.O. Box 25, Winneba, Ghana

Abstract: This study aims at examining the capability of audit report disclosures in predicting firm failure in Ghana. An online survey was adopted in soliciting 337 responses from financial analysts and external audit practitioners, using purposive and convenience sampling techniques. The Smart PLS 3.0 analytical tool was used in analysing the responses. The outcomes of the study show that, audit report disclosures significantly [p value < 0.001, effect size (f² = 1.232), R² = 0.552] predict firm failure in Ghana; both exogenous and endogenous variables contribute to bankruptcy. The results of the study have implications for researchers and regulators as the audit report is considered a useful tool in detecting and avoiding business failure in Ghana.

Keywords: audit report disclosures; predict; firm failure; resource-based theory; RBT; Ghanaian context.

DOI: 10.1504/IJCA.2023.136830

International Journal of Critical Accounting, 2023 Vol.13 No.3, pp.227 - 248

Accepted: 20 Sep 2023
Published online: 22 Feb 2024 *

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