Jovana Stojanović – University of Niš, Innovation Centre at University of Niš, Univerzitetski trg 2, Serbia

Milica Đorđević – University of Niš, Faculty of Economics, Trg kralja Aleksandra Ujedinitelja 11, Serbia

Auditors’ reports;
Audit modification;
Financial statements;
Earnings quality;
Investment decisions


Abstract: In the professional literature, the largest number of studies focus on examining and analyzing the content of auditors’ reports and their impact on the quality of financial statements, while a smaller number of au- thors examine the impact of audit opinions on earnings persistence. Since understanding the type of audit opinion undoubtedly allows investors to as- sess the quality of a company’s earnings and predict future cash flows, this paper investigates whether they react differently when making capital investment decisions if the financial statements contain a modified opinion. By looking at the previous literature, the authors consider market reactions, especially when it comes to some kind of modified opinion, given that they can cause a negative reaction and affect the reduction of earnings persistence. The research results so far show, although inconsistent and unusual, still interesting results when it comes to the impact of the audit opinion on earnings persistence. By analyzing previous studies, the authors reveal whether investors give enough importance to the audit opinion when mak- ing financial and investment decisions, which could later affect the amount of additional capital, which is a necessary condition for development, especially in transition and developing countries. In addition to the conclusions of this paper being relevant for users of financial statements, especially investors, they are also significant for regulatory bodies, as they indicate the necessity of constant improvement of the accounting and auditing system.

6th International Scientific Conference on Recent Advances in Information Technology, Tourism, Economics, Management and Agriculture – ITEMA 2022 – Selected Papers, Hybrid (University of Maribor, Slovenia), October 27, 2022

ITEMA Selected Papers published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia

ITEMA conference partners: Faculty of Economics and Business, University of Maribor, Slovenia; Faculty of Organization and Informatics, University of Zagreb, Varaždin; Faculty of Geography, University of Belgrade, Serbia; Institute of Marketing, Poznan University of Economics and Business, Poland; Faculty of Agriculture, Banat’s University of Agricultural Sciences and Veterinary Medicine ”King Michael I of Romania”, Romania

ITEMA Conference 2022 Selected Papers: ISBN 978-86-80194-64-6, ISSN 2683-5991, DOI:

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License ( which permits non-commercial use, reproduction and distribution of the work without further permission. 

Suggested citation

Stojanović, J., & Đorđević, M. (2022). Do Audit Opinions Affect Earnings Persistence? In V. Bevanda (Ed.), International Scientific Conference ITEMA 2022: Vol 6. Selected Papers (pp. 71-80). Association of Economists and Managers of the Balkans.


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