Financial analysis: a tool for detecting manipulations in business operations of a company
DOI:
https://doi.org/10.71159/bizinfo260020DKeywords:
financial analysis, manipulations in financial statements, indicators of irregularitiesAbstract
Financial statements represent a key source of information for investors, creditors and other interested parties when making relevant business decisions. However, the financial reporting process can be subject to various forms of manipulation. In this context, financial analysis, that is, analysis of financial reports and the application of analytical procedures based on information from those reports, becomes one of the basic tools of modern business decision-making, with a significant role in the identification and prevention of manipulations in the financial reporting of companies. Its relevance is reflected in its ability to recognize unusual relationships among financial data that do not have an economically based explanation. The paper explores the methods and techniques of financial analysis, with a special focus on identifying indicators of irregularities and potential manipulations using the Beneish M-Score model as a specific instrument of financial analysis. The aim of the paper is to point out the importance of financial analysis as a means of detecting and preventing manipulative activities in the business of a company.
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