A re-evaluation of auditors’ opinions versus statistical models in bankruptcy prediction

A re-evaluation of auditors’ opinions versus statistical models in bankruptcy prediction Existent empirical evidence on the relative performance of auditors’ going concern opinions versus statistical models in predicting bankruptcy is mixed. This study attempts to add new reliable evidence on this important issue by conducting the comparison based upon an improved statistical model. The improved statistical model incorporates some new developments advocated by recent bankruptcy prediction research (e.g., Shumway, 2001). First, the following non-traditional variables are added: a composite measure of financial distress, industry failure rate, abnormal stock returns, and market capitalization. Secondly, a hazard model is employed. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

A re-evaluation of auditors’ opinions versus statistical models in bankruptcy prediction

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Kluwer Academic Publishers-Plenum Publishers
Copyright © 2006 by Springer Science+Business Media, LLC
Finance; Corporate Finance; Accounting/Auditing; Econometrics; Operation Research/Decision Theory
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