The informational value contained in the different types of auditor’s opinions: Evidence from Portugal

This paper examines the distinct types of modified auditor opinions and non-compliance with legal certification accounts, to assess whether they provide different relevant informational content on risk impending bankruptcies. The study also addresses signalling effects when firms do not comply disclosure obligations. Controlling for a priori classification, we find that opinion have dissimilar marginal influences, disclaimer denoting highest level risk, followed by accounts issuance an auditor’s adverse opinion. odds firm becoming failed are significantly greater emphases reserves issued Big 4 auditor. These findings based evidence 36,509 in Portugal, country characterized proportionately high number small-sized audited lack independent oversight auditors, which makes it setting analyse.