The impact of client size and financial performance on audit opinion: Evidence from a developing market

Purpose:
This research investigates the effect of audit client size and its financial performance on audit opinion in the Egyptian audit market. A few studies have investigated the association between these factors in the audit context, especially in African developing countries.
Methodology:
Data are manually collected from the annual financial reports of firms registered in the Egyptian Stock Market focusing on a sample of EGX 70 during the period 2012 to 2016, and binary logistic regression is used in data analysis.
Result:
The results indicated that company size is insignificantly, positively, related to a qualified, rather than unqualified, type of audit opinion. In contrast, client financial performance has a significant, but negative, relationship with the qualified type of audit opinion. This study provides insights for managers and investors in developing countries that are useful in understanding and perceiving audit opinions in these contexts