Grant: Applied Research and Development Grants - Level 1

The collapse of Arthur Anderson LLP and other businesses such as Enron and WorldCom were, in part, theresult of insufficient skepticism by the accounting profession. As a result, the profession is now held to a higherstandard with regard to financial statement presentation and audit oversight. However, many standards used byauditors rely primarily upon management's application of standards and the opinion of the auditor as to theaccuracy of financial information and measurement.Given the importance of accurate accounting measurement for public use, a requirement of an external auditoris to annually determine the ability of a business to continue as a ""Going Concern"". This analysis permits theauditor to classify the business in order to value assets by using the ""lower of cost or net realizable value""method.The goal of this research is to determine the application of the going concern principle, based on a rigidapplication of data analytics, as it relates to creative industries and to develop a mathematical model which willassist the auditor to determine if the business is in fact a going concern.This research is intended to develop a model of measurement which includes both financial and non-financialindicators to improve the going concern determination. Auditors may then use the model in their evidencecollection phase in order to provide better assurance to the public regarding the financial statements of abusiness.