Detecting Fraud

Question 1

Messod Daniel Beneish, accounting professor of the Kelley School of Business Indiana University, has 5 factors that increase earnings manipulation:

Answer 1

1 increasing days sales receivables
2 deteriorating gross margins
3 decreasing rates of depreciation
4 Decreasing asset quality
5 Growing Sales

Question 2

Decreasing asset quality is defined as an…

Answer 2

Increase in ratio of noncurrent assets to total assets (does not include property, plant equipment)