The risk of insolvency and the audit report
Author
Anna Ros – (UPF – Barcelona School of Management)
Alba Ruiz – (UPF – Barcelona School of Management)
Carles Rusiñol – (UPF – Barcelona School of Management)
Alexandre Valeriano – (UPF – Barcelona School of Management)
Received August 25, 2019; accepted September 27, 2019.
Abstract
When auditors detect that a company might have problems of insolvency, they have to inform about it with an emphasis paragraph where it is questioned whether it is appropriate to apply “the going concern principle”. This work analyses if auditors are effective in assessing the risk of insolvency and compares it with the Z score formula which applies the discriminant analysis to generate forecasts.
Cuando los auditores detectan que una empresa podría tener problemas de insolvencia, tienen que informar al respecto con un párrafo de énfasis donde se cuestiona si es apropiado aplicar “el principio de empresa en marcha”. Este trabajo analiza si los auditores son efectivos para evaluar el riesgo de insolvencia y lo compara con la fórmula de puntaje Z que aplica el análisis discriminante para generar pronósticos.
Citation
Ros, A., Ruiz, A., Rusiñol, C., & Valeriano, A. (2019). The Risk of Insolvency and the Audit Report. European Accounting and Management Review, 6(1), 40-52.
Figures
Keywords
- Auditing
- Insolvency
- Z score
- Ratios
Palabras clave
- Auditoría
- Insolvencia
- Z score
- Ratios
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