How Auditors Can Better Predict Bankruptcy

Law360, New York (November 8, 2012, 4:38 PM EST) -- The Wall Street Journal reported on Nov. 8 (“Keeping Mum About the ‘B Word’”) that almost one-third of a sample of public companies filing for Chapter 11 reorganization over the past several years failed to inform investors that steps were being taken to prepare for that eventuality.

As the Journal notes, the securities laws’ mandate for full disclosure may or may not apply in this particular circumstance, although doubtless many investors would wish for earlier warnings about such looming developments. In fairness, however, the mere mention...
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