Audit Report Paragraphs and Financial Distress during Covid ۱۹

The Covid-۱۹ pandemic affected several aspects of human life and produced financial distress. The pandemic caused an important effect on financial reporting and auditing process. In addition to the problems associated with receiving an audit report regarding the going concern of the company, researches show that receiving any audit paragraph in the auditor's report that indicates a major problem in any of the financial statements headings, it can indicate a significant weakness in the financial statements, which may also affect future profitability and future activities. The aim of this research is to investigate the effect of qualified audit report paragraphs on financial distress during Covid-۱۹ pandemic. Research samples include ۱۱۰ companies listed on Tehran Stock Exchange during ۲۰۱۸ until ۲۰۲۱. The results show that the effect of the independent variable of the number of disclosed condition paragraphs regarding non-current assets on the dependent variable of financial distress is positive and significant. Moreover, the effect of the independent variable of the number of paragraphs regarding the disclosed condition of non-current debts on the dependent variable of financial distress is positive and significant. As well as, the effect of the independent variable on the number of paragraphs of the disclosed condition regarding accumulated profit and loss on the dependent variable of financial distress is positive and significant. The effect of the independent variable on the number of paragraphs of the disclosed condition regarding income and expenses of the current year on the dependent variable of financial distress is positive and significant.

Keywords:

Audit Report Paragraphs , Financial Distress , Audit Opinion , Covid ۱۹