Detection of fraud in financial reporting of small and medium entities in the field of manufacturing industry

The importance of forensic accounting has been growing in recent years, especially when it comes to small and medium enterprises (SMEs). These entities do not have sufficiently developed accounting functions, they do not invest enough in staff who are not consequently motivated to present certain it...

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Autor principal:	Kušter Denis
Formato:	article
Lenguaje:	SR
Publicado:	University Business Academy - Faculty of Economics and Engineering Management, Novi Sad, Serbia 2021
Materias:	forensic accounting beneish m-score manipulations financial reporting manufacturing Business HF5001-6182
Acceso en línea:	https://doaj.org/article/a000f7f026c0460ca9e2153e332fc232
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spelling	oai:doaj.org-article:a000f7f026c0460ca9e2153e332fc2322021-12-05T20:58:35ZDetection of fraud in financial reporting of small and medium entities in the field of manufacturing industry2217-54582620-022810.5937/etp2102017Khttps://doaj.org/article/a000f7f026c0460ca9e2153e332fc2322021-01-01T00:00:00Zhttps://scindeks-clanci.ceon.rs/data/pdf/2217-5458/2021/2217-54582102017K.pdfhttps://doaj.org/toc/2217-5458https://doaj.org/toc/2620-0228The importance of forensic accounting has been growing in recent years, especially when it comes to small and medium enterprises (SMEs). These entities do not have sufficiently developed accounting functions, they do not invest enough in staff who are not consequently motivated to present certain items of financial statements in a precise manner and in accordance with accounting standards. This results in reporting errors. The other side of the coin are the manipulations that happen with the intention and goal of presenting better business than the real situation to banks and other stakeholders. In this research paper, Beneish's M-Score model with five variables (M5) was applied as a method of forensic accounting, in order to detect manipulations in SMEs from sector C-Manufacturing in Serbia. The sample includes 73 companies, and only for 3 of them the M (5) Score exceeded the reference value and indicated a high risk of manipulation. The situation is different when looking at model variables individually; however, the results of the Mann-Whitney test indicate that there is no statistically significant difference in the level of liquidity and profitability of a firm depending on whether an entity manipulated from the individual model variables point of view or not.Kušter DenisUniversity Business Academy - Faculty of Economics and Engineering Management, Novi Sad, Serbiaarticleforensic accountingbeneish m-scoremanipulationsfinancial reportingmanufacturingBusinessHF5001-6182SREkonomija: teorija i praksa, Vol 14, Iss 2, Pp 17-37 (2021)
institution	DOAJ
collection	DOAJ
language	SR
topic	forensic accounting beneish m-score manipulations financial reporting manufacturing Business HF5001-6182
spellingShingle	forensic accounting beneish m-score manipulations financial reporting manufacturing Business HF5001-6182 Kušter Denis Detection of fraud in financial reporting of small and medium entities in the field of manufacturing industry
description	The importance of forensic accounting has been growing in recent years, especially when it comes to small and medium enterprises (SMEs). These entities do not have sufficiently developed accounting functions, they do not invest enough in staff who are not consequently motivated to present certain items of financial statements in a precise manner and in accordance with accounting standards. This results in reporting errors. The other side of the coin are the manipulations that happen with the intention and goal of presenting better business than the real situation to banks and other stakeholders. In this research paper, Beneish's M-Score model with five variables (M5) was applied as a method of forensic accounting, in order to detect manipulations in SMEs from sector C-Manufacturing in Serbia. The sample includes 73 companies, and only for 3 of them the M (5) Score exceeded the reference value and indicated a high risk of manipulation. The situation is different when looking at model variables individually; however, the results of the Mann-Whitney test indicate that there is no statistically significant difference in the level of liquidity and profitability of a firm depending on whether an entity manipulated from the individual model variables point of view or not.
format	article
author	Kušter Denis
author_facet	Kušter Denis
author_sort	Kušter Denis
title	Detection of fraud in financial reporting of small and medium entities in the field of manufacturing industry
title_short	Detection of fraud in financial reporting of small and medium entities in the field of manufacturing industry
title_full	Detection of fraud in financial reporting of small and medium entities in the field of manufacturing industry
title_fullStr	Detection of fraud in financial reporting of small and medium entities in the field of manufacturing industry
title_full_unstemmed	Detection of fraud in financial reporting of small and medium entities in the field of manufacturing industry
title_sort	detection of fraud in financial reporting of small and medium entities in the field of manufacturing industry
publisher	University Business Academy - Faculty of Economics and Engineering Management, Novi Sad, Serbia
publishDate	2021
url	https://doaj.org/article/a000f7f026c0460ca9e2153e332fc232
work_keys_str_mv	AT kusterdenis detectionoffraudinfinancialreportingofsmallandmediumentitiesinthefieldofmanufacturingindustry
_version_	1718371020143853568

Detection of fraud in financial reporting of small and medium entities in the field of manufacturing industry

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