The "going concern" assumption: accounting and auditing implications
Gespeichert in:
| 1. Verfasser: | |
|---|---|
| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Toronto
Canadian Inst. of Chartered Accountants
1991
|
| Schriftenreihe: | Research report / Canadian Institute of Chartered Accountants
|
| Schlagworte: | |
| Online-Zugang: | Inhaltsverzeichnis |
| Beschreibung: | XXVII, 231 S. Ill. |
| ISBN: | 0888002335 |
Internformat
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| 245 | 1 | 0 | |a The "going concern" assumption |b accounting and auditing implications |c J. E. Boritz |
| 264 | 1 | |a Toronto |b Canadian Inst. of Chartered Accountants |c 1991 | |
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| 650 | 4 | |a Auditing |x Standards |z Canada | |
| 650 | 4 | |a Disclosure in accounting | |
| 650 | 4 | |a Going concern (Accounting) | |
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Datensatz im Suchindex
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|---|---|
| adam_text | TABLE OF CONTENTS
Page
PREFACE xi
EXECUTIVE OVERVIEW xiii
SUMMARY OF RECOMMENDATIONS xxi
Chapter
1. INTRODUCTION
Objective 1
The Going Concern Concept 1
Importance of the Going Concern Issue 3
Economic significance of business failures 3
Inadequate frequency and timeliness
of going concern disclosures 7
Limitations of current accounting and auditing standards 10
Macdonald Commission recommendations 11
Call for Changes to Current Standards 12
2. THE RISK OF BUSINESS FAILURE
THE GOING CONCERN ASSUMPTION
Introduction 15
The Going Concern Concept and
Its Relation to the Risk of Business Failure 15
Stages of Business Failure 17
Terms associated with business failure 21
Warning Signs of the Risk of Business Failure 25
When Does the Going Concern Assumption
Stop Being Appropriate? 27
Foreseeable future 29
Determining the degree of doubt about the validity of
the going concern assumption 30
Conclusion and Recommendation 32
Chapter Page
3. ACCOUNTING STANDARDS REPORTING PRACTICES
REGARDING GOING CONCERN UNCERTAINTIES
Introduction 37
Accounting Standards, Guidelines and Authoritative Literature 37
International standards, guidelines and other literature 38
United Kingdom, Australia and New Zealand 40
United States 41
Standards in Canada 42
Assessment of Canadian Standards Governing
the Going Concern Assumption 43
Reporting Practices of Canadian Public Companies 45
Evaluation of Reporting Practices 55
Are going concern disclosures timely? 55
Are going concern disclosures complete? 59
Are the disclosures understandable? 60
Conclusion 61
4. RECOMMENDATIONS FOR CHANGES
IN ACCOUNTING STANDARDS
Introduction 65
Measurement Issues Related to Carrying Values
Used in the Financial Statements 65
Criteria for Identifying Going Concern Uncertainties 68
Accounting Recommendations 70
Basic criteria 70
Timing of disclosures 70
Location of disclosures 71
Content of disclosures 71
Conclusion 74
5. AUDITING STANDARDS PRACTICES
REGARDING GOING CONCERN UNCERTAINTIES
Introduction 77
Auditing Standards in the English Speaking World 78
International standards 78
Standards in the United Kingdom, Australia and New Zealand 79
Standards in the United States 80
Standards in Canada 82
Assessment of Standards Governing Going Concern Uncertainties 84
Passive versus active duty to consider the
validity of the going concern assumption 86
The auditor s reporting obligation regarding doubts about the
appropriateness of the going concern assumption 87
Chapter Page
5. AUDITING STANDARDS PRACTICES
REGARDING GOING CONCERN UNCERTAINTIES
(continued)
Auditing Practices 90
Going Concern Disclosures and the Self Fulfilling Prophecy 92
Going Concern Disclosures and Audit Firm Switching 96
Conclusion 96
6. RECOMMENDATIONS FOR CHANGES
IN AUDITING STANDARDS
Introduction 99
Criteria for Identifying Going Concern Uncertainties 99
Auditing Recommendations 102
Nature and extent of examination 102
Reporting responsibilities 104
Conclusion 106
7. TECHNIQUES FOR PREDICTING
FINANCIAL DISTRESS BANKRUPTCY
Introduction 109
Ratio Analysis 109
Statistical Methods 113
Statistical ratio analysis 113
Pattern analysis 116
Discriminant analysis 117
Zeta 125
Probit and logit 125
Other mathematical approaches 128
Evaluating the accuracy of distress prediction models 128
Graphical Aids 131
Questionnaires and Checklists 132
Expert Systems 133
Group Assessments of Potential Business Failure 135
Conclusion and Recommendations 137
APPENDICES
A Indicators of Going Concern Problems 143
B Survey of Going Concern Disclosures 171
C Rules for Prototype Going Concern Expert System 197
GLOSSARY OF TERMS 207
BIBLIOGRAPHY 213
LIST OF FIGURES AND TABLES
Title Page
Figure I Typical Stages of Business Failure 18
Figure II Going Concern Assessments 26
Figure III Typical Stages of Business Failure
and Going Concern Doubts 28
Figure IV Discriminant Analysis 119
Figure V Altaian s Discriminant Analysis Model 121
Table I Canadian Bankruptcy Statistics 4
Table II Proposal Statistics 8
Table III Terms Associated with Business Failure 23
Table IV Comparison of Valuation Alternatives 39
Table V Summary of Authoritative Literature
on the Going Concern Assumption 44
Table VI Going Concern Disclosures
Among Info Globe Database Companies 46
Table VII Going Concern Disclosures — by Industry 47
Table VIII Going Concern Disclosures — by Type 48
Table IX Going Concern Disclosures — by Location 50
Table X Going Concern Disclosures — by Heading 51
Table XI Classification of Going Concern Uncertainties 53
Table XII Predictors of Going Concern Opinions 58
Table XIII Indicators of Going Concern Problems
from SAS No. 59 83
Table XIV Comparison of Auditing Standards
Governing the Going Concern Assumption 85
Table XV Auditors Opinions as Predictors of Financial Distress.. 93
Table XVI Going Concern Disclosures
as Predictors of Business Failure 95
Table XVII Key Financial Ratios for Predicting Bankruptcy Ill
Table XVIII Significant Variables for US Financial Institutions 123
Table XIX Canadian Financial Distress Prediction Models 124
|
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| indexdate | 2024-07-09T19:23:13Z |
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| isbn | 0888002335 |
| language | English |
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| physical | XXVII, 231 S. Ill. |
| publishDate | 1991 |
| publishDateSearch | 1991 |
| publishDateSort | 1991 |
| publisher | Canadian Inst. of Chartered Accountants |
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| series2 | Research report / Canadian Institute of Chartered Accountants |
| spelling | Boritz, Jefim Efrim Verfasser aut The "going concern" assumption accounting and auditing implications J. E. Boritz Toronto Canadian Inst. of Chartered Accountants 1991 XXVII, 231 S. Ill. txt rdacontent n rdamedia nc rdacarrier Research report / Canadian Institute of Chartered Accountants Accountancy gtt Faillissement gtt Faillite - Comptabilité Faillite - Vérification comptable Valeur d'exploitation (Comptabilité) Auditing Standards Canada Disclosure in accounting Going concern (Accounting) Going concern (Accounting) Standards Canada Kanada HBZ Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=010745043&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis |
| spellingShingle | Boritz, Jefim Efrim The "going concern" assumption accounting and auditing implications Accountancy gtt Faillissement gtt Faillite - Comptabilité Faillite - Vérification comptable Valeur d'exploitation (Comptabilité) Auditing Standards Canada Disclosure in accounting Going concern (Accounting) Going concern (Accounting) Standards Canada |
| title | The "going concern" assumption accounting and auditing implications |
| title_auth | The "going concern" assumption accounting and auditing implications |
| title_exact_search | The "going concern" assumption accounting and auditing implications |
| title_full | The "going concern" assumption accounting and auditing implications J. E. Boritz |
| title_fullStr | The "going concern" assumption accounting and auditing implications J. E. Boritz |
| title_full_unstemmed | The "going concern" assumption accounting and auditing implications J. E. Boritz |
| title_short | The "going concern" assumption |
| title_sort | the going concern assumption accounting and auditing implications |
| title_sub | accounting and auditing implications |
| topic | Accountancy gtt Faillissement gtt Faillite - Comptabilité Faillite - Vérification comptable Valeur d'exploitation (Comptabilité) Auditing Standards Canada Disclosure in accounting Going concern (Accounting) Going concern (Accounting) Standards Canada |
| topic_facet | Accountancy Faillissement Faillite - Comptabilité Faillite - Vérification comptable Valeur d'exploitation (Comptabilité) Auditing Standards Canada Disclosure in accounting Going concern (Accounting) Going concern (Accounting) Standards Canada Kanada |
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