IS ACCOUNTING FRAUD PREDICTABLE?
Recent financial scandals due to accounting fraud in corporate America have created interest among researchers investigating possible motivations and signs for early detection. This research uses publicly available financial information of firms to address the basic question of whether accounting fraud is predictable. This paper examines the changes in variables over time to identify possible indicators of fraud. The findings indicate that an increase in leverage ratios, changes in ZMI bankruptcy scores, smaller size firms, and increases in discontinued items appear to be correlated with increased fraud.ABSTRACT FROM AUTHORCopyright of Review of Business Research is the property of International Academy of Business &Economics (IABE) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No
