Scientific Research and Recent Findings in Financial Monitoring

Abstract

The article discusses the existing studies on the issue of financial monitoring and the suggestions that their authors have. The discussion of these studies begins with the American scientist Edward Altman's Z-model, which he proposed to predict the risk of bankruptcy for companies. The article presents both an earlier and a modified version of the Z-model developed by Edward Altman. The article also discusses and evaluates the 9-factor model developed by V. Fulmer and R. Saifulin and G. Kadikov's four-factor models. Among the more recent studies in the field of monitoring is the study of the Portuguese scientist Ana Paula Lopez, who found that the companies served by the audiences of the "big four" no longer cheat in the financial part. Malaysian scholars Noor Aisha Nizan and Zuhaikha Zailan found in 2019 that it is best to combine financial audits with technological and human audits. Also, in 2019, Vilnius scientist P. Poshinaus argued that monitoring should be carried out only by economic-mathematical methods, because they provide great opportunities for finding financial irregularities. And in 2020, Czech scientist Aneta Zemankova proposed to the public to use artificial intelligence in monitoring. With its implementation, smart audit procedures and smart contracts can be performed in an automated manner. The authors of the article conclude that the auditors of Georgia, due to the low level of mathematical education, cannot use blockchains and artificial intelligence, but also economic-mathematical models in the audit, and raise the issue of the need to retrain them in this direction. The article discusses the issues of dividing diversified companies into responsibility centers and their financial monitoring. Keywords: Financial monitoring; probability of bankruptcy; Z - model; Fulmer's model; mathematical models; Responsible centers.