Analysis of the situations requiring a positive opinion on the public opinion in Turkey: Independent auditors report analysis of 2006-2016

The identification of issues that cause the reporting of modified audit opinions in independent audit reports is of capital importance for businesses, independent auditors and users of financial information. This study aims to examine in which situations the publicly-held companies in Turkey received modified audit opinions. In the study, the modified audit opinions received by the companies traded in Istanbul Stock Exchange during the period of 2006-2016 have been examined by content analysis method, one of the qualitative research methods, and the situations revealed by the opinions in the report have been tabled in terms of sub-sectors and auditing firms. The study determined that the most modified audit opinions were issued in 2008; the companies in the textile industry, one of the sub-sectors of manufacturing sector, received the most modified audit opinions; the companies in the chemical sector received the most disclaimer of opinions; and only the companies in the food sector received adverse opinion reports. It was also determined that the most common cause of qualified opinions was the lack of provisions put aside; the most common cause of disclaimer of opinions was the lack of sufficient evidence for the independent auditor to form opinions, and the most common cause of adverse opinions was insufficient data and evidence for some of the amounts in some accounts. On the other hand, the most modified audit opinions were issued by the international audit firms, followed by the national audit firms and Big 4 accounting firms respectively. Moreover, most disclaimer of opinions were issued by international auditing firms whereas the least were issued by the Big 4 auditing firms. Lawsuits filed against companies were the most common cause why the Big 4 issued qualified opinions whereas the lack of provisions put aside was the most common cause why international auditing firms and national auditing firms issued qualified opinions. The study also found out that the Big 4 accounting firms did not issue any disclaimer of opinions; the most common cause why disclaimer of opinions were issued by the national auditing firms was the lack of provisions put aside; and the most common cause why international auditing firms issued disclaimer of opinions was the lack of sufficient evidence for the independent auditor to form opinions.