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Article
Going-Concern Opinions: Broadening the Expectations Gap
The CPA Journal
  • Michael D. Akers, Marquette University
  • Meredith A Maher, Marquette University
  • Don Giacomino, Marquette University
Document Type
Article
Publication Date
10-1-2003
Publisher
New York State Society of Certified Public Accountants
Disciplines
Abstract

A rash of high-profile bankruptcies has led to a search for answers. Many hold auditors responsible for not detecting the potential for bankruptcy during the most recent audit. The Weiss Report, a study of several dozen bankrupt companies submitted to the U.S. Senate during its deliberations on the Sarbanes-Oxley Act, found a "broad and massive failure" on the part of auditors to raise "yellow flags" that indicate potential bankruptcy. The authors examined Weiss' methodology and found that, applied to a broader group of companies, Weiss' criteria would have incorrectly predicted bankruptcy for nearly half of the non-bankrupt companies studied. This failure to accurately predict undermines the credibility of the subsequently enacted legislation.

Comments

Published version. The CPA Journal, Vol. 73, No. 10 (October 2003): 38-42. Publisher link. Reprinted from The CPA Journal, October, 2003, © 2003, with permission from the New York State Society of Certified Public Accountants.

Citation Information
Michael D. Akers, Meredith A Maher and Don Giacomino. "Going-Concern Opinions: Broadening the Expectations Gap" The CPA Journal (2003) ISSN: 0732-8435
Available at: http://works.bepress.com/michael_akers/7/