Using a bankruptcy model in the auditing course: The evaluation of a company as a going concern

Journal Article

In order to evaluate whether a company is experiencing a going-concern problem, the auditor must know what information needs to be acquired as well as how to combine that information. Financial Z-score models can be employed as an analytical tool in making a going-concern judgment. These models employ a statistical technique termed discriminant analysis which allows one to combine information into a single measure which is then used to classify a company as either bankrupt or nonbankrupt. This paper describes an activity-based exercise in which students use financial models to make going concern judgments. In addition, the students are exposed to financial databases maintained on CD-ROM. Copyright © 1996 Elsevier Science Ltd.

Full Text

Duke Authors

Cited Authors

  • Paquette, LR; Skender, CJ

Published Date

  • January 1, 1996

Published In

Volume / Issue

  • 14 / 3

Start / End Page

  • 319 - 329

International Standard Serial Number (ISSN)

  • 0748-5751

Digital Object Identifier (DOI)

  • 10.1016/0748-5751(96)00024-3

Citation Source

  • Scopus