IDEAS home Printed from https://ideas.repec.org/a/eme/jfrapp/v14y2016i2p266-278.html
   My bibliography  Save this article

Detecting fraudulent financial reporting using financial ratio

Author

Listed:
  • Emie Famieza Zainudin
  • Hafiza Aishah Hashim

Abstract

Purpose - The main aim of this study is to analyse the financial ratio (i.e. financial leverage, profitability, asset composition, liquidity and capital turnover ratio) in detecting fraudulent financial reporting (FFR). Design/methodology/approach - The logit model was used to identify firms that are related to FFR. The sample firms that engage in fraudulent reporting were obtained from the media centre of Bursa Malaysia. The firms were selected based on their contravention of the Listing Requirements of Bursa Malaysia Securities Berhad. The data cover a period of seven years from 2007 to 2013. Findings - The results suggest that financial leverage, asset composition, profitability and capital turnover were significant predictors of FFR. Practical implications - The findings of this study may assist investors in making decision for their investments. Originality/value - This study describes firms that breach the Listing Requirements of Bursa Malaysia Securities Berhad using the financial ratio.

Suggested Citation

  • Emie Famieza Zainudin & Hafiza Aishah Hashim, 2016. "Detecting fraudulent financial reporting using financial ratio," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 14(2), pages 266-278, October.
    • Handle: RePEc:eme:jfrapp:v:14:y:2016:i:2:p:266-278
    DOI: 10.1108/JFRA-05-2015-0053
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2015-0053/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2015-0053/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/JFRA-05-2015-0053?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hyunjung Nam & Won Gyun No & Youngsu Lee, 2017. "Are Commercial Financial Databases Reliable? New Evidence from Korea," Sustainability, MDPI, vol. 9(8), pages 1-23, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jfrapp:v:14:y:2016:i:2:p:266-278. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.