KRYTYTCZNA ANALIZA STOSOWANIA METODY EDWARDA ALTMANA W BADANIU SPRAWOZDAŃ FINANSOWYCH
CRITICAL ANALYSIS OF THE ALTMAN’S METHOD IN THE AUDIT OF FINANCIAL STATEMENTS

Summary/Abstract: The aim of the article was an attempt to critically evaluate, in terms of methodology, the phenomenon of widespread use the E. Altman’s method by statutory auditors and court experts for the examination of financial statements. Out of 100 randomly selected opinions of statutory auditors, the Altman’s method was used in 82 cases to assess the risk of bankruptcy of the audited company, usually omitting the criterion of the surveyed enterprises (especially the fact of sector membership and the fact of listing on the Stock Exchange). Numerous errors and methodical simplifications have been shown in trying to apply this method, which reduce the diagnostic reliability of the obtained results, and in extreme cases even disqualify them. The article questioned the reliability of the diagnostic model of E. Altman in the Polish economic conditions, in the bankruptcy risk assessment procedure of economic entities based on financial statements.

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