The Going Concern Opinion: A Time for a Referendum?

19 Pages Posted: 2 Apr 2010

See all articles by Igor Pustylnick

Igor Pustylnick

Far Eastern Federal University; Conestoga College

Vicki Anderson

affiliation not provided to SSRN

John H. Nugent

Texas Woman's University - College of Business; Texas Woman's University College of Business

Date Written: March 28, 2010

Abstract

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

Pustylnick, Igor and Anderson, Vicki and Nugent, John H., The Going Concern Opinion: A Time for a Referendum? (March 28, 2010). Available at SSRN: https://ssrn.com/abstract=1579785 or http://dx.doi.org/10.2139/ssrn.1579785

Igor Pustylnick

Far Eastern Federal University ( email )

8 Suhanova St.
Vladivostok 690950
Russia

Conestoga College ( email )

299 Doon Valley Drive
Kitchener, Ontario N2G 4M4
Canada

Vicki Anderson

affiliation not provided to SSRN

John H. Nugent (Contact Author)

Texas Woman's University - College of Business ( email )

Denton, TX
United States
214-682-8025 (Phone)

Texas Woman's University College of Business ( email )

Denton, TX
United States
214-682-8025 (Phone)

HOME PAGE: http://www.twu.edu

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