Recently I came across a very interesting paper on detection of fraud in financial reporting. This paper “Major Financial Reporting Frauds of the 21st Century: Corporate Governance and Risk Lessons Learned”, authored by Hugh Grove and Elisabetta Basilico was published in Journal of Forensic & Investigative Accounting (Vol. 3, Issue 2, Special Issue, 2011 of).
Authors of this paper start by explaining 10 red flags in corporate governance. Their premise is that if one was looking at these flags or factors, it should have been possible to detect several large corporate accounting scandals. Authors discuss nine accounting frauds (Citigroup, Worldcom, Enron, Qwest, Tyco, Global Crossing, Lehman Brothers, Satyam and Paramlat) to illustrate their idea.
I liked very user friendly tone of this article which doesn’t assume prior knowledge of complex accounting ideas. However, best part of this article is its appendix. Authors have provided a very readable and concise summary of important accounting metrics and ratios.
When I read it, this paper was available at following link.
http://www.bus.lsu.edu/accounting/faculty/lcrumbley/jfia/Articles/FullText/2011_v3n2a7.pdf
I look forward to your feedback, suggestions and comments.
No comments:
Post a Comment