ability of an auditor to project whether the client has a going-concern problem. If it does have a problem, this fact must be stated in the audit report and a QUALIFIED OPINION REPORT rendered. Failure to do so, if a client actually becomes bankrupt, will expose the CPA to lawsuits by financial statement users such as damaged investors and creditors. There are several ways to predict bankruptcy such as Altman's Z SCORE, trends in certain financial ratios (e.g., cash flow to total debt, net income to total assets), degree of FINANCIAL  LEVERAGE, industry problems, poor economy, and low-quality management.