Analysis of earnings manipulation practices of Finnish and German companies using Beneish M-score model
Roshchina, Kristina (2016)
Roshchina, Kristina
Jyväskylän ammattikorkeakoulu
2016
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2016091414266
https://urn.fi/URN:NBN:fi:amk-2016091414266
Tiivistelmä
The research was aimed at exploring the earnings manipulations level using Beneish M-score model. The analysis was implemented over a period of six years on the basis of companies’ data, which represents Finnish and German markets. The main objectives were to ascertain whether Beneish M-score model is capable of predicting earnings overstatements in the cases of Finland and Germany and to state which market yields less submission to the financial manipulations.
Secondary numeric data was acquired from official databases and financial statements of the companies on the both Finnish and German markets. The application of the SPSS software provided with an opportunity to conduct a correlational research and a descriptive statistics analysis. All in all, both methods assisted to test the stated hypothesizes and to answer the research questions. Correlational research afforded to gain information concerning the level of association between two variables in Beneish M-score formula. Descriptive statistics performed as an appropriate option to obtain the main characteristics about the market tendencies, and to identify which market is more favorable for the future investments.
The results disclose that there is a strong association between the Days’ Sales in Receivable Index (DSRI), Gross Margin Index (GMI), the Total accrual to total assets (TATA), the Sales Growth Index (SGI), the AQI (Asset Quality Index), the Sales, General, Administrative Expenses Index (SGAI), and the M-score that affirms the hypothesis about the possibility to predict manipulations with the help of Beneish model. Furthermore, Finnish market is more stable and applicable for the trustworthy investments. The theoretical analyses allowed to draw the traits of high-quality earnings environment.
Secondary numeric data was acquired from official databases and financial statements of the companies on the both Finnish and German markets. The application of the SPSS software provided with an opportunity to conduct a correlational research and a descriptive statistics analysis. All in all, both methods assisted to test the stated hypothesizes and to answer the research questions. Correlational research afforded to gain information concerning the level of association between two variables in Beneish M-score formula. Descriptive statistics performed as an appropriate option to obtain the main characteristics about the market tendencies, and to identify which market is more favorable for the future investments.
The results disclose that there is a strong association between the Days’ Sales in Receivable Index (DSRI), Gross Margin Index (GMI), the Total accrual to total assets (TATA), the Sales Growth Index (SGI), the AQI (Asset Quality Index), the Sales, General, Administrative Expenses Index (SGAI), and the M-score that affirms the hypothesis about the possibility to predict manipulations with the help of Beneish model. Furthermore, Finnish market is more stable and applicable for the trustworthy investments. The theoretical analyses allowed to draw the traits of high-quality earnings environment.