A Review of Financial Distress Research Methods and Recommendations for Future Research‪.‬

INTRODUCTION Since Beaver's seminal study in 1966, substantial research has been published concerning the ability of accounting information to predict financial distress (bankruptcy). This area of research uses financial distress as a criterion for evaluating the usefulness of accounting information. Although researchers have used this predictive ability criterion to test many accounting variables, much of the empirical research in this area has centered around the use of a predictive ability criterion to compare the usefulness of accrual and cash flow information.