On‐going business success is not a ‘given’ and business failure is reasonably common. Such failures include 36 listed companies in New Zealand (2001–10), which, in liquidating, incurred losses for many small stakeholders. The purpose of this paper is to determine whether these failures could have been anticipated from public information available at the time. Of the 36 failing companies, 25 are matched to 25 non‐failing New Zealand and Australian companies. Financial and audit report data are obtained for the three years prior to failure, yielding 150 sets of data. Ten ratios, three failure‐prediction models and three nominal indicators, which were all available at the time, are applied to the data. News reports and media are reviewed. Findings reveal that while no specific forecasts of failure are publicised through mainstream New Zealand media, significant differences between failing and non‐failing firms do exist: 75% of the tested indicators show or approach significance in one or more of the three years prior to failure. Indications increase where data for all three years is combined. Conclusions are that problems could have been signalled and published, providing stakeholders bases for enquiry. Implications are as to a failure of public accountability in this respect, how practice and policy could address this problem, and suggestions for further research.
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