Applied Economics 45(1) pp. 135-140.
ISSN/ISBN: 1466–4283 DOI: 10.1080/00036846.2011.605759
Abstract: Firms have tendency to window dress their financial statements by reporting earnings to achieve reference points represented by N × 10 k . Such practice of reporting rounded earnings is likely due to (1) firms may believe that investors perceive a reported earnings of $1.99 million to be significantly less than $2.0 million; and/or (2) contracts between firms and stakeholders are likely to express earnings in round numbers. Auditors have employed more sophisticated digital analysis such as Benford's law, as part of their fraud detection processes. This study investigated the window dressing behaviour among firms in the US marine industry. The findings of the study suggest that window dressing is a significant practice among the marine firms. However, the extent of the pervasiveness of such behaviour is less severe among marine firms than among all publicly-listed firms in the entire US economy, suggesting that the quality of financial statements of marine companies is higher than the overall population of public companies.
Bibtex:
@article{,
title={Applying digital analysis to detect fraud: an empirical analysis of US marine industry},
author={Hsieh, Chin Hsien and Lin, Fengyi},
journal={Applied Economics},
volume={45},
number={1},
pages={135--140},
year={2013},
publisher={Taylor \& Francis},
ISSN={1466–4283},
DOI={10.1080/00036846.2011.605759},
}
Reference Type: Journal Article
Subject Area(s): Accounting