Beneish M-Score: Identifying Financial Statement Manipulations

Analyzing Financial DataAccording to the ACFE’s “Report to the Nation 2016” financial statement fraud occurred in less than 10% of the cases reported by the respondents. But it caused the highest median loss of $975,000. Asset misappropriation schemes was reported in more than 83% of the cases with median loss of $125,000. And Corruption cases fell in the middle with 35.4% of cases with median loss of $200,000. Several cases included schemes in more than one category.

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Financial Shenanigans: Earnings Manipulation (Part 2)

In my previous post I mentioned the brief summary of accounting shenanigans identified by Howard Schilit in his book Financial Shenanigans used by management to manipulate earnings, cash flow and key metrics.
Below is the summary of various methods management uses to manipulate the earnings through the 7 Earnings manipulation shenanigans.

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Financial Shenanigans (Part 1)

ShenanigansSecret or dishonest activity or maneuvering

Recently I was reading Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports. The book by Howard Schilit and Jeremy Perler sheds the light on various Shenanigans (methods/techniques) which management uses to cook the books to make businesses look better than they actually are.

It’s a good read for both investors and auditors as the authors have used real examples like that of Enron, WorldCom, Tyco, etc. and other lesser known corporate scams detailing how they were perpetuated before they saw the light of day and how one could have spotted the false accounting in these cases. The Shenanigans given are:

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Investment Portfolio Tracker

We all invest in stocks and Mutual funds and tracking their performance sometimes becomes a problem.

So I found this wonderful tracker by Kyith on http://www.investmentmoats.com/ which is an excellent tool to keep track of your investments. Kyith has made a google spreadsheet for tracking the stocks. I have just converted that google spreadsheet into excel spreadsheet and added some functionalities and also removed certain features like cash register, dividend tracker (Which I didn’t required).

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CISA Exam Resources

Last December I gave my CISA exam, and cleared it. As being from the financial audit background I thought the paper to be heavy on IT concepts, but I found the paper lighter on the IT side and more skewed towards the audit concepts.

I used the official ISACA manual and question database with CISA study guide by David L Cannon. I found the official manual a bit dry, so I went with the David L Cannon’s CISA study guide.

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