Abstract
The ability of a business entity to develop and at least to survive is crucial for all stakeholders. Nowadays, mostly statistical methods are applied in its assessment. Efficiency of these methods is restrained by multiple and changing factors influencing the risk of disruption of continuation as a going concern, which raises the necessity of seeking an alternative solution. A new solution should be aimed at the analysis of the ability and not only the assessment of threats to continuing operation. The objective of the work is to present the research findings which justify the necessity of a multidimensional evaluation of an entity to define its ability to keep operating under the conditions of sustainable development. The article presents the findings of the expert research and surveys conducted in the years 2013–2015. As an alternative to discriminant analysis models, the author presents the concept of a multidimensional assessment of an entity, its scope, and the interpretation of its results. The presented model allows the assessment of the maturity level of an organization in the implementation of a sustainable development strategy, the assessment of an entity’s ability to continue as a going concern, and its potential to create value for stakeholders.
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Notes
- 1.
However, according to the research conducted, declarations made by the management to continue as a going concern are usually very general in nature, whereas statutory auditors’ conclusions expressed in the opinion of the vast majority of cases confirm the validity of the assumption of the management (e.g., see, Wielogórska-Leszczyńska 2012).
- 2.
In the adopted measurement scale, the impact level was determined as a percentage, where 0 means no impact or no likelihood of impact; 0.1, almost no impact and unlikely; 0.2, fairly small impact and unlikely; 0.3, small and potentially possible; 0.4, less than average and potentially possible; 0.5, average and probable; 0.6, more than average and highly probable; 0.7, quite large and likely; 0.8, big and highly probable; 0.9, very large impact and very likely; and 1, decisive influence—a very large and certain.
- 3.
For the purpose of carrying out analysis in this respect, the following assumptions concerning the assessment were made: 1 (100 % coverage), in the case of the auditor’s declaration on the completed implementation of the audit; 0.5 (50 %), for the declaration of a partial assessment; and 0 (0 %), in the absence of assessment. The author is aware of the shortcomings of the adopted scale for a partial assessment (as this assessment is blurred—can take values different from 50 %); however, it allows outlining the scale of the issues in question and makes a visual presentation. Detailed results of the research are presented in Ciechan-Kujawa (2014c).
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Ciechan-Kujawa, M. (2017). The Business Audit as an Alternative to Discriminant Analysis in Assessing Risks of Going Concern. In: Bilgin, M., Danis, H., Demir, E., Can, U. (eds) Financial Environment and Business Development. Eurasian Studies in Business and Economics, vol 4. Springer, Cham. https://doi.org/10.1007/978-3-319-39919-5_10
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