The Going Concern Opinion: A Time for a Referendum?
19 Pages Posted: 2 Apr 2010
Date Written: March 28, 2010
This paper addresses the large and growing problem of identifying business enterprises for which a 'Going Concern Opinion' (GCO) might be appropriate, and the means by which such decision are reached. Changes in corporate financial health, as they relate to the management and auditor assessment regarding the requirement for issuing a GCO, are fraught with challenges. However, by defining and applying 'Bright Line' methodology, material changes in corporate financial health may be made on a prospective basis. This determination should assist the auditor in making a GCO decision.
Keywords: Bright Lines, Inflection Points, Going Concern Opinions, GCOs, EBRC, Self-fulfilling prophecies, bankruptcy, PCAOB, KPIs, Algorithms, Chanos, Altman, Pustylnick, SAS 59, P Score, Z Score, C Score, auditor, Referendum
JEL Classification: G33, K22, M41
Suggested Citation: Suggested Citation