Using Analytics to Detect Possible Fraud: Tools and Techniques

358 Pages·2013·12.44 MB·English

by  Pamela S. Mantone(eds.)

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Using Analytics to Detect
Possible Fraud
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Using Analytics to
Detect Possible Fraud
Tools and Techniques
PAMELA S. MANTONE
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ISBN978-1-118–58562-7(Hardcover);ISBN978-1-118–71595-6(ebk)
ISBN978-1-118–71598-7(ebk)
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Toallwhocherishtheopportunitytocontinuetolearnand
excelinwhatevertheymaydo.
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Contents
Preface xi
Acknowledgments xv
Chapter1: OverviewoftheCompanies 1
TheFourCompanies 2
Company1 2
Company2 5
Company3 8
Company4 10
Summary 16
Chapter2: The“Norm”andthe“Forensic”Preliminary
Analytics:BasicsEveryoneShouldKnow 19
LiquidityRatios 20
WorkingCapital 21
WorkingCapitalIndex 21
WorkingCapitalTurnover 22
CurrentRatio 22
CaseStudies:LiquidityRatios 22
ProfitabilityRatios 25
GrossProfit 26
GrossProfitMargin 26
StockSales 26
ReturnonEquity 27
CaseStudies:ProfitabilityRatios 27
Company1 31
HorizontalAnalysis 36
Company1 36
Company2 43
Company3 50
vii
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viii & Contents
Company4 61
VerticalAnalysis 66
Company1 66
Company2 70
Company3 73
Company4 79
Summary 79
Chapter3: TheImportanceofCashFlowsandCashFlow
Statements 83
CashFlowsandNetIncome 85
Company1 87
Company2 89
Company3 92
Company4 97
OtherCashFlowTechniques 100
Company1 101
Company2 104
Company3 107
Company4 114
Summary 117
Chapter4: TheBeneishM-ScoreModel 119
Company1 124
Company2 133
Company3 143
IndicesofthePrimaryGovernment 145
IndicesoftheGovernmentalFunds 151
Company4 158
Summary 166
Notes 170
Chapter5: TheAccruals 171
Dechow–DichevAccrualQuality 173
TheFourCompanies:Dechow–DichevModel 175
Sloan’sAccruals 184
TheFourCompanies:Sloan’sModel 185
JonesNondiscretionaryAccruals 191
TheFourCompanies:JonesModel 192
Summary 196
Notes 198
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Contents & ix
Chapter6: AnalysisTechniquesUsingHistoricalFinancial
StatementsandOtherCompanyInformation 199
ThePiotroskiF-ScoreModel 200
Company1 203
Company2 205
Company3 207
Company4 212
Lev–Thiagarajan’s12Signals 215
Company1 220
Company2 222
Company3 225
Company4 230
Summary 233
Notes 235
Chapter7: Benford'sLaw,andYes—EvenStatistics 237
Benford’sLaw 239
Company1 243
Company2 249
Company3 255
Company4 267
SimpleStatistics 272
Company1 277
Company2 281
Company3 284
Company4 289
Summary 290
Note 292
Chapter8: GradingtheFourCompanies 293
Company1 294
Company2 302
Company3 310
Company4 320
Summary 326
Bibliography 329
AbouttheAuthor 331
Index 333
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