Earnings Manipulation in Listed Automobile Companies Using Beneish M-Score and Altman Z-Score Model
Abstract
The ipurpose iof ithis istudy iis ito icompare itwo iforensic iaccounting itoolsthe ibeneish M-score iand ithe ialtman iz-score imodelsfor ithe ieffective idetection iof ifraud iin corporate bodies. Iusing a data set from the iautomobile iindustries ifrom ithe iyear i2017-2019, iis imade with ithe imain iintentiof inoticing malfeasance iusing ithe itwo imodels. Ithe imethodology usediin this istudy iis ias ioptional iby ibeneish imessod ifor im-score iand ialtman ifor Z-Score. Ithe iresults ishow ithat iwhereas ithe ibeneish imodel iwas inot iable ito idetect iany fraud, ithe ialtman iz-score iprovided isome iindication ithat ithe icompanys ifinancial statements iwere iflawed. Ialthough ithe ibeneish imodel iis ivery ipopular ifor ipredicting fraudulent ifinancial istatements, ithe iresults iof ithe ipresent istudy ido inot iindicate iits effectiveness. Ithe istudy iaccomplishes ithat iselecting ithe iright iforensic itool ican iinfluence the ioutcome iof ifraud idetection. Ithe ioutcome iof ithe istudy iprovides iuseful idirection ito investors, ifinancial auditors,iandiforensiciaccountants whenimaking ipolicyidecisions. Thisipaper provides some evidence onithe effectiveness iscientific itools iin idetection iof ifinancial ireports fraud iof icorporate ibodies. Ithis iis ithe ifirst istudy ito ipresent ithe itwo ipopularitools ion current iindian ilisted iautomobile isector iincludingi:itata imotors, imahindra i& imahindra, Maruti isuzuki, ihero imotorcorp, ibajaj iauto, ieicher imotors, iashok ileyland, iforce imotors.
