""Going Concern"" And The Effects Of The Operational Cycle Management. An Empirical Study Concerning The Usage Of Financial Analysis For Obtaining Preliminary Proofs In The Task Of Financial Audit
In the financial audit engagement, the auditor’s objective is to express an independent and professional opinion regarding the accuracy of financial statements, in agreement with the accounting reference. Also, the auditor will ensure that financial statements have been drawn in compliance with the principle of the “going concern”. This paper aims at setting the foundation of a basic mathematical model, based on the correlations established between a set of variables capable of characterizing the changes in the operating activity, which helps obtaining audit proofs regarding the (non-) compliance with the principle of going concern of the audited entities. Designing this model implies a study of the financial statements belonging to a sample made up of 80 quoted companies, following the benchmark of financial audit standards. The suggested model will be tested through a sensitivity analysis using the Monte Carlo method. For processing the information, for the regression analyses, and for the multiple correlations implied by the foundation of the model, the statistic instrument SPSS 15.0 will be used.
Volume (Year): 2011SE (2011)
Issue (Month): (july)
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- Jinn-Yang Uang & David B. Citron & Sudi Sudarsanam & Richard J. Taffler, 2006. "Management Going-concern Disclosures: Impact of Corporate Governance and Auditor Reputation," European Financial Management, European Financial Management Association, vol. 12(5), pages 789-816.
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- Max Bessell & Asokan Anandarajan & Ahson Umar, 2003. "Information content, audit reports and going-concern: an Australian study," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 43(3), pages 261-282.
- Ella Mae Matsumura & K.R. Subramanyam & Robert R. Tucker, 1997. "Strategic Auditor Behavior and Going-Concern Decisions," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 24(6), pages 727-758.
- Asad Kausar & Richard J. Taffler & Christine Tan, 2009. "The Going-Concern Market Anomaly," Journal of Accounting Research, Wiley Blackwell, vol. 47(1), pages 213-239, 03.
- Kathleen Herbohn & Vanitha Ragunathan & Robert Garsden, 2007. "The horse has bolted: revisiting the market reaction to going concern modifications of audit reports," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 47(3), pages 473-493.
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