Examining and Comparing the Ability of Altman, Zmijewski's and Hybrid Models in Predicting Financial Distress with an Emphasis on Report Content and Audit Quality Indicators
mohamad reza pourhosein
1
(
Department of Accounting, Ra.C., Islamic Azad University, Rasht, Iran.
)
Soghra Barari nokashti
2
(
Department of Accounting, Ra.C., Islamic Azad University, Rasht, Iran
)
Mohsen Khodadadi
3
(
Department of Accounting, RoA.C., Islamic Azad University, Roudsar, Iran
)
Keywords: Accounting and auditing information, Financial distress, Quality audit indicators.,
Abstract :
The purpose of the present study is to investigate and compare the ability of Altman (1968) and Zimsky (1984) models and a combination of them in predicting financial distress using financial information and coding of audit report data as well as audit quality measurement indicators.
considered to be an applied study in terms of its objective, because its results can be used in the decision-making process, and since in this study, the data were collected based on real past information, it is of the post-event type. In terms of the way the research hypotheses are inferred, it is classified as descriptive-correlational research, because regression and correlation techniques were used to determine the relationship between variables. Thus, in terms of reasoning, it is classified as inductive research. Also, this study is of the type of positive theory, because the conclusion is made through testing the available data. In order to achieve the research objective, data from 87 companies listed on the Tehran Stock Exchange during 2013-2022 were collected and tested using logistic regression analysis based on combined data.
The results showed that the modified Altman and Zimsky model using audit quality output criteria has a greater ability to predict financial distress of companies compared to the original Altman (Zimsky) model. In addition, the findings showed that including audit quality input criteria in the original Altman (Zimsky) model increases the ability to predict financial distress of companies.
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