Closely Held Firms as Going Concerns

21 Pages Posted: 16 May 2001

See all articles by Michael S. Long

Michael S. Long

Rutgers University at Newark

Stephan Sefcik

University of Washington - Department of Accounting

Date Written: March 2001


The current definition of a "going concern" according to GAAP does not take into consideration whether an on-going business exists that is separate or separable from its owner/manager in a closely-held firm or is merely an extension of the individual as an entity. In this study, we propose two criteria that would facilitate making this financing decision as it creates a relevant distinction for potential creditors. Finally, we also recommend that a going concern qualification be reinstated in the attestation process to motivate implementing this new definition for small, closely-held firms.

JEL Classification: M41, M49

Suggested Citation

Long, Michael S. and Sefcik, Stephan E., Closely Held Firms as Going Concerns (March 2001). Available at SSRN: or

Michael S. Long (Contact Author)

Rutgers University at Newark ( email )

111 Washington Avenue
Newark, NJ 07102
United States
973-353-5471 (Phone)

Stephan E. Sefcik

University of Washington - Department of Accounting ( email )

224 Mackenzie Hall, Box 353200
Seattle, WA 98195-3200
United States

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