The Relationship between Managerial Ability, Managerial Overconfidence and Going-Concern Opinion-The Mediating of Financial Distress “Evidence from Listed Egyptian Industrial Firms”

This research aimed to study the direct and indirect relationship between two of the most important administrative characteristics, namely: managerial ability and managerial overconfidence, and Going-Concern Opinion, through  financial distress as a mediate variable. By Using 419 observation which collected from 79 industrial firms that listed on the Egyptian Stock Exchange, it was possible to analyze their financial reports from 2015 to 2020. By applying the path analysis. The results of this research provided  an important scientific and practical rustle, the most important of them: that the relationship between administrative characteristics and modified  going-concern opinion that  appears as an indirect relationship only. There is indirect negative (positive) relationship between managerial ability (managerial overconfidence) and  going- concern opinion, financial distress as a mediate variable. The additional analysis of the research also provides an important result that indicate an indirect positive relationship between managerial overconfidence and modified  going-concern opinion, via real earning Management as a mediate variable. In general, the relationship between the administrative characteristics and the professional judgments of auditors should be studied through two dimensions:(1) performance/ financial condition perspective, (2) information perspective. Totally, administrative characteristics provide value relevance informational that contributes to assessment the professional judgment.