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COMPARISON OF LIQUIDITY BASED AND FINANCIAL PERFORMANCE BASED INDICATORS IN FINANCIAL ANALYSIS

100%

Pustylnick I.

Oeconomia Copernicana

2017

vol. 8

issue 1

83-97

Research background: Since the turn of the 21st century financial statement manipulations became the center of attention for accountants, auditors and financial analysts. Since being classified by the regulators as fraudulent, earnings management has required a separate detection methodology. The majority of detection research is performed through the comparison of a large number of statements for the same company in order to find irregularities in earnings behavior. Shortening of the detection time and the amount of data becomes important. Purpose of the article: The goal was to compare the characteristics of M-Score and ∆P-∆R and to find their advantages and limitations. Applying both indicators to the different samples, the research attempted to determine the statistical connection between them and to set up the limits of their applicability. Since M-Score indicator is liquidity-based, this research attempted to determine to which extent M-Score and Z-Score are statistically related. Methods: The research paper compares the behavior of both indicators using various samples of financial data: the sample of companies, charged with fraud, the sample with exceptional liquidity, the large random sample and the sample from the emerging market economy. Based on the original observations, two other subsamples (one based on poor Z-Score and one based on exceptional Z-Score) were extracted from the main sample. For all samples ∆P-∆R, M-Score and Z-Score were statistically compared among and between themselves. Findings/value added: The research found the limitations of ∆P-∆R and M-Score in the stable markets and was able to connect them in the emerging market by using linear regression model (also including Z-Score). The research confirmed that M-Score can mistake exceptional performance for manipulations, resulted in Type I errors. ∆P-∆R appeared somewhat coarse and prone to Type II errors. The combined use of both in the emerging markets will provide the best approach.

Motywy fałszowania sprawozdań finansowych a zasady etyczne

86%

Sylwestrzak M., Białek-Jaworska A., Opolski K.

Studia i Materiały

2018

issue 1(27) cz. 2

79-89

This paper aims to present the motives of financial statement fraud and the impact of professional ethics on the detection and prevention of this phenomenon in business. We present the main reasons for data manipulation by management staff. The importance of professional ethics in detecting financial fraud is also described. Particular attention is paid to the factors that are most important in detecting this phenomenon. In the article, attention has been paid to the influence of whistleblowers and the role of qualitative indicators of earnings on the disclosure of the discussed procedure.

Celem artykułu jest wskazanie motywów fałszowania sprawozdań finansowych oraz wpływu etyki zawodowej na wykrywanie i zapobieganie temu zjawisku w przedsiębiorstwach. Przedstawiono główne przesłanki manipulowania danymi przez kadrę zarządzającą. Opisano również znaczenie etyki zawodowej w detekcji oszustw finansowych wraz z zaprezentowaniem, które czynniki mają największe znaczenie w wykrywaniu zjawiska. Szczególną uwagę zwrócono na wpływ demaskatorów na ujawnienia omawianego procederu oraz wskazano rolę wskaźników jakościowych wyniku finansowego w wykrywaniu oszustw finansowych.

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1 Oeconomia Copernicana

1 Studia i Materiały

1 Białek-Jaworska A.

1 Opolski K.

1 Pustylnick I.

1 Sylwestrzak M.

1 2018

1 2017

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COMPARISON OF LIQUIDITY BASED AND FINANCIAL PERFORMANCE BASED INDICATORS IN FINANCIAL ANALYSIS

Motywy fałszowania sprawozdań finansowych a zasady etyczne