Heuristic Diagnostic Indices for Audit Independence, Evidence Verification, Project Deterioration and Budgetary Rigidity

Abstract

This paper proposes five heuristic diagnostic indices for organisational and financial vulnerability: the Financial Independence Erosion Index (FIEI), the Field Verification Gap Index (FVGI), the Sunk Cost Depletion Index (SCDI), the Budgetary Iterative Rigidity Index (BIRI) and the Cumulative Overrun Escalation Coefficient (COEC). They form a second methodological layer within the author’s broader Unified Diagnostic Architecture of Organisational Failure. The present version revises the original formulations in response to a structural review. Multiplicative constructions that allowed one deficient dimension to be erased by a zero in another have been replaced by bounded, non-compensatory or additive forms. Duration-dependent artefacts in COEC have been removed. Measurement definitions, scope conditions and treatment of undefined values are stated explicitly, and worked numerical examples show how each revised index behaves relative to its predecessor. Numerical alert thresholds from the earlier version are withdrawn, because no derivation or empirical basis was offered for them; regulatory reference points are provided instead as anchors for later calibration. The indices are presented as computationally explicit constructs awaiting empirical validation, not as validated scales, professional standards or regulatory measures. A staged validation programme addressing content, construct, criterion and incremental validity is set out.