Earnings Manipulation: Techniques to Assess Earnings Quality

Many profit-driven entities perform, to a certain extent, financial cosmetics and engineering on their reported numbers to achieve targeted budgets and grow their bonus compensation. Sometimes those entities take this conduct and behavior too far due to influences such as greediness, worry, ethical issues and wrong professional judgment leading to what we know as corporate fraud. Parmalat, WorldCom and Enron are major specimens of companies who cooked the books.

In this webinar entitled “Earnings Manipulation: Techniques to Assess Earnings Quality”, we will be discussing tools and tips that you can apply to protect your investments from Enron-style disasters. Main topics to be covered will be differentiation between financial reporting quality and earnings quality, discussing Beneish Model to describe degree to which earnings are manipulated, Altman Z-score to assess potential bankruptcy and evaluating earnings persistence by analyzing the entity’s accruals.