Financial Statement Fraud: A Case Examination Using Beneish Model and Ratio Analysis

Abstract

 Abstract—Fraud is a major concern for organizations world-wide. Governments and regulators are now focusing on management's responsibility for effective fraud management programs. It is not a matter whether your organization is large or small or what country or industry your organization is in, as long as humans are involved in organizations, the risk of fraud is real. This paper discusses a local case and our analyses are basically subjected to how the fraud was committed and the detection techniques involved. Beneish Model and Ratios Analysis were selected as detection tools in reference to this case. Being the best tools chosen for this case, those techniques will benefit the auditors and other professionals. They can learn these simple, yet effective methods of financial statement fraud detection. Legal implications and its uses will also be discussed in this paper.