Using Nonfinancial Measures to Asses Fraud Restatement and Distress Risk: The case of Taiwanese Firms

  • 林 佳蓉

Student thesis: Master's Thesis

Abstract

Since analytical procedures using only financial data are likely to be ineffective for detecting fraud the profession has re-evaluated its fraud assessment processes and has attempted to find new ways identifying fraud The purpose of this study is to examine whether auditors can effectively use nonfinancial measures (NFMs) that are positively correlated with financial measures (e g revenue growth) to assess fraud restatement and distress risk Given that auditors can identify NFMs (e g employee growth) that are positively correlated with financial measures (e g revenue growth) and NFMs are less easily manipulated than financial statements inconsistencies between NFMs and financial performance measures may be indicative of higher fraud restatement and distress risk It is found that discrepancies between NFMs and financial measures are greater for fraud restatement and distress firms than is the case for their competitors It is also found that inconsistencies between NFMs and financial measures appear to be a red flag for fraud restatement and distress when variables that have been previously linked to the likelihood of fraud restatement and distress are included in the model Overall the results empirically show that NFMs can be effectively used to assess fraud restatement and distress risk
Date of Award2015 Jul 8
Original languageEnglish
SupervisorChaur-Shiuh Young (Supervisor)

Cite this

Using Nonfinancial Measures to Asses Fraud Restatement and Distress Risk: The case of Taiwanese Firms
佳蓉, 林. (Author). 2015 Jul 8

Student thesis: Master's Thesis