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Application Of Selected Creative Accounting Techniques To Detect Fraud In Financial Statements

Table 1: Beneish model characteristics

Indicator Characteristics
DSRI Days sales in Receivables Index = (Receivables1/Sales1)/(Receivablest-1/Salest-1)
GMI Gross Margin Index = [(Salest-1 – Costs of goods soldt-1)/Salest-1]/[(Salest – Costs of goods soldt)/Salest]
AQI Asset Quality Index = [1-(Current assetst + Property, plant, equipmentst)/Assetst]/[1-(Current assetst-1 + Property, plant, equipmentst-1)/Assetst-1]
SGI Sales Growth Index = Salest/Salest-1
DEPI Depreciotion Index = [Deperciationt-1 + net Property, plant, equipmentst-1)]/ [Depreciationt/(Depreciotiont + net Property, plant, equipmentst)]
SGAI Sales General and Administrative Expenses Index = (Selling, general, administrative expenset/Salest)/(Salling, general, administrative expenset-1/Salest-1)
LVGI Leverage Index = [(Long term debtt + Current liabilitiest)/Assetst]/[(Long term debtt-1 + current liabilitiest-1)/Assetst-1]
TATA Total Accruals to Total Assets= [(Current assetst – Casht – Current liabilitiest – Current maturities of long term debtt) – (Current assetst-1 – Casht-1 – Current liabilitiest-1 – Current maturities of long term debtt-1) – (Income tax payablet – Income tax payablet-1) – Depreciationt]/Assetst
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