Resumen

This paper provides evidence that audit reports convey relevant evidence for inferring the existence of underlying, unrevealed, financial imbalances. Unlike previous works, which studied US listed-firms bankruptcy, our research deals with Spanish non-financial SMEs under financial stress. Our results indicate that the audit of distressed SMEs has several distinctive features: higher auditor rotation, more qualified reports, and non-compliance with deadlines to approve and file the annual financial statements. We use this evidence to build and test a parsimonious and reliable forecast model. Several implications for auditors' independence, information quality, and failure forecast are discussed.

In the research group we are working to provide further empirical evidence on the business failure forecast. Complex fitting modelling; the study of variables such as the audit impact on business failure; the treatment of traditional variables and ratios have led us to determine a starting point based on a reference mathematical model. In this regard, we have restricted the field of study to non-financial galician SMEs in order to develop a model 1 to diagnose and forecast business failure. We have developed models based on relevant financial variables from the perspective of the financial logic, voltage and financial failure, applying three methods of analysis: discriminant, logit and multivariate linear. Finally, we have closed the first cycle using mathematical programming-DEA or Data Envelopment Analysis-to support the failure forecast. The simultaneous use of models was intended to compare their respective conclusions and to look for interrelations. We can say that the resulting models are satisfactory on the basis of their capacity for prediction. Nevertheless, DEA contains significant points of criticism regarding its applicability to business failure.

Predicción del fracaso empresarial. Una contribución a la síntesis de una teoría mediante el análisis comparativo de distintas técnicas de predicción*1 Business failure prediction. A contribution to the synthesis of a theory, through comparative analysis of different prediction techniques

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