Consistent with our conjecture that audit committee composition becomes less important when the appropriateness of a going-concern report is more evident, we find that the issuance of a going-concern report is positively associated with the interaction of default status and the percentage of affiliated directors (p < 0.05). We also continue to find that the greater the percentage of affiliated directors on the audit committee, the lower the probability of receiving a going-concern report (p < 0.01)