Discussion: “An Analysis of the Usefulness of Debt Defaults and Going Concern Opinions in Bankruptcy Risk Assessment”

Abstract

“Much Ado About Nothing?” Not quite, but one wonders where the real contribution is in this paper; indeed, in the several articles that have been written on the paper's central premise. The central premise is that the occurrence of a loan default or loan accommodation adds significantly to the ability of a model to accurately explain and predict bankruptcy. A minor theme involves the examination of whether an auditor's going concern qualification, with or without the already observed loan default/accommodation, adds to our ability to predict bankruptcy.