e-Publications@Marquette

Title

Going-Concern Opinions: Broadening the Expectations Gap

Authors

Michael Akers, Marquette UniversityFollow
Meredith A. Maher, Marquette University
Don Giacomino, Marquette UniversityFollow

Document Type

Article

Publication Date

10-2003

Source Publication

The CPA Journal

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

Originally published in The CPA Journal, Volume 73, No. 10 (October 2003).

Reprinted from The CPA Journal, October, 2003, copyright 2003, with permission from the New York State Society of Certified Public Accountants.

This article is the published version.