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L iquidate O r T rade O ut ? A n E xpert S ystem T o E xplain T he D ecision P rocess
Author(s) -
Leech Stewart,
Sexton TiinaLiisa
Publication year - 1994
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/j.1835-2561.1994.tb00148.x
Subject(s) - financial distress , business , business administration , accounting , financial system
The decision to liquidate or trade out a company in financial distress requires considerable judgment by a provisional liquidator or administrator. While some general procedures and guidelines are available, there is no explicit framework to assist a provisional liquidator or administrator in making a recommendation to liquidate or trade out. This paper reports on the development of an expert system as a method of studying the judgments made by provisional liquidators or administrators in cases of corporate financial distress. The results reveal the major factors that are assessed in making a liquidate or trade‐out decision, and support recent calls for expanding the type of information provided by traditional accounting systems.