The Role of The Auditor in Assessing the Bankruptcy Risk in the Global Crisis
Author:
Univ. Prof. PhD Gheorghe POPESCU, Univ. Lecturer PhD Veronica Adriana POPESCU, Univ. Assistant PhD student Cristina Raluca POPESCU
JEL:
DOI:
Keywords:
going concern, liquidity, solvability, financial equilibrium, scores method, bankruptcy risk
Abstract:
The study defines the risk of bankruptcy and emphasizes the role of the auditor in knowing the client, with a particular focus on rigurous assessment of the principle of activity continuation, the more so considering the aggravating conditions of the current economical-financial crisis, a crisis of atypical nature, difficult to control and to estimate from a side and time standpoint. The specific tools of economical-financial analysis are presented, considered as the most adequate in identifying the bankruptcy risk, in calculating and interpreting on a dynamics level the liquidity and solvability rates, as well\r\nas the indicators of financial equilibrium. In order to know information as precise as possible regarding the bankruptcy risk, the study also includes the scores method, the objective of which is to provide predictive models for evaluating a company`s bankruptcy\r\nrisk. Two of the most used models are presented, the Altman model and the Conan - Holder model.