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dc.contributor.authorKuruppu Niroshen
dc.contributor.authorLaswad Fawzien
dc.contributor.authorOyelere Peter, B.en
dc.date.accessioned2009-05-19T03:09:10Z
dc.date.issued2002-05en
dc.identifier.urihttps://hdl.handle.net/10182/1062
dc.description.abstractAlthough previous research generally finds bankruptcy prediction models to outperformauditors' views on going concern, accuracy in identifying failing companies is lower. Recent research questions whether bankruptcy is the best proxy for assessing going concern, since filing for bankruptcy is not synonymous with the invalidity of the going concern assumption. Furthermore, in contrast to debtor oriented countries such as the US, liquidation is the most likely outcome of corporate insolvency in creditor oriented countries such as the UK, Germany, Australia and New Zealand. This suggests that bankruptcy prediction models have limited use for assessing going concern in creditor oriented countries. Previous research hasnot recognised this distinction between corporate bankruptcy and liquidation in developing statistical models as an audit tool for assessing going concern. This study examines the efficacy of a corporate liquidation model and a benchmark bankruptcy prediction model for assessing company liquidation. It finds that the liquidation model is more accurate in predicting company liquidations in comparison with the benchmark bankruptcy prediction model. Most importantly. Type 1 errors for the liquidation prediction model is significantlylower than for the bankruptcy prediction model, which indicates its greater efficacy as an analytical tool for assessing going concern. The results also suggest that bankruptcy prediction models may not be appropriate for assessing going concern in countries where the insolvency code is creditor oriented.en
dc.format.extent1-21en
dc.language.isoenen
dc.publisherLincoln University. Centre of Accounting Education and Researchen
dc.relationThe original publication is available from - Lincoln University. Centre of Accounting Education and Research - http://hdl.handle.net/10182/1062en
dc.relation.ispartofseriesDepartment of Financial and Business Systemsen
dc.subjectauditingen
dc.subjectanalytical techniquesen
dc.subjectcorporate governanceen
dc.subjectfinancial analysisen
dc.subjectliquidationen
dc.subjectbankruptcy predictionen
dc.subjectinsolvency frameworken
dc.subjectbusiness failuresen
dc.subjectgoing concernen
dc.titleThe efficacy of liquidation and bankruptcy prediction models for assessing going concernen
dc.typeWorking Paper
dc.subject.marsdenFields of Research::340000 Economics::340200 Applied Economics::340203 Finance economicsen
dc.subject.marsdenFields of Research::340000 Economics::340200 Applied Economics::340202 Environment and resource economicsen
dc.subject.marsdenFields of Research::340000 Economics::340400 Econometrics::340401 Economic models and forecastingen
dc.subject.marsdenFields of Research::350000 Commerce, Management, Tourism and Services::350100 Accounting, Auditing and Accountabilityen
lu.contributor.unitLincoln Universityen
lu.contributor.unitFaculty of Agribusiness and Commerceen
lu.contributor.unitDepartment of Financial and Business Systemsen
dc.subject.anzsrc1501 Accounting, Auditing and Accountabilityen
dc.subject.anzsrc1502 Banking, Finance and Investmenten
pubs.notesThis working paper is the first in a new series produced by the Centre of Accounting Education and Research (CAER) at Lincoln University. The first issue has been assigned the numbering of the Lincoln University Commerce Division Discussion Paper series in error, no. 97. Subsequent CAER Working Papers are numbered from no. 1 onwards.en
pubs.organisational-group/LU
pubs.organisational-group/LU/Faculty of Agribusiness and Commerce
pubs.organisational-group/LU/Faculty of Agribusiness and Commerce/FABS
pubs.publication-statusPublisheden
pubs.publisher-urlhttp://hdl.handle.net/10182/1062en
dc.publisher.placeLincoln, Canterburyen


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