Dr. Navulur Krishna Surarchith
Accounting Department, Tishk International University, Erbil.
Email: [email protected]
DOI: 10.23918/ICABEP2021p8
The fraud in financial statements is the major concern for many organizations, auditors and the government. The aim of the research paper is to identify the effectiveness of ratio analysis and digital analysis as a procedural way in detecting fraud in financial statements. Beneish’s probit model recommended ratio and trend analysis by relating the nexus between importances of the financial statements to observe manipulation of earnings. Benford’s Law recommended digital analysis in fraud detection based on the actual frequency of few digits in various positions in the financial data. Researcher analyzed secondary data of top10 fraudulent companies which were listed in Forbes to test both ratio and digital analysis. Researcher applied quantitative method to analyze published financial statements of fraudulent companies and chose last four financial years from the previous financial year. The study helps the investors, auditors and government to estimate the ease of using the above methods in fraud detection and avoid malpractices during preparation of financial statements.
Keywords: Fraud Detection, financial statements, ratio analysis and digital analysis
ICABEP2021
International Conference on Accounting, Business, Economics and Politics
3rd joint conference organized by the collaboration of the Faculty of Administrative Sciences and Economics,
Tishk International University, College of Administration and Economics, Salahaddin University-Erbil, and
University of Szczecin, Poland.
