Search results

1 – 1 of 1
Per page
102050
Citations:
Loading...
Access Restricted. View access options
Article
Publication date: 1 March 1991

Hian Chye Koh and Robert Moren Brown

This article discusses the limitations of existing going‐concerndiscriminant models and explores the use of weighted probit analysis toconstruct a classification model for the…

226

Abstract

This article discusses the limitations of existing going‐concern discriminant models and explores the use of weighted probit analysis to construct a classification model for the auditor to use in making going/non‐going concern decisions. The model is constructed using probit analysis with the weighted exogenous sample maximum likelihood (WESML) procedure on a matched sample of 80 going and non‐going concerns. Using the Lachenbruch′s U method of computing holdout accuracy rates, the probit model classifies going/non‐going concerns with an accurate rate of 82.50 per cent for non‐going concerns, 100.00 per cent for going concerns, and 91.50 per cent overall. These accuracy rates are higher than those of the sample auditors, which are 40.00, 97.50, and 68.75 per cent, respectively. The model is expected to be useful as a going‐concern prediction model, a persuasive analytical tool, and a defensive device.

Details

Managerial Auditing Journal, vol. 6 no. 3
Type: Research Article
ISSN: 0268-6902

Keywords

1 – 1 of 1
Per page
102050