Evaluating a company’s financial health and performance always involves a degree of uncertainty, but there are measures that can be utilized to more objectively review financial strength. Metrics, such as the Altman Z-Score, have been developed in an attempt to … Continue reading
Category Archives: AQRM
Non-Audit Fees Among S&P 500
A review of non-audit fees in relation to overall audit fees is an interesting comparison, as the SEC considers high non-audit fees to be an auditor independence concern. If an auditor earns a large amount of fees performing non-audit fee … Continue reading
An Overview of Nineteen Years of Changes in Accounting Estimates
While some numbers in financial statements are relatively straightforward, others can be complex. Some of the more complex figures that are unable to be concretely quantified require management to make significant estimates. There are many components of financial statements that … Continue reading
Accounting Quality + Risk Matrix Allows for Quick Insight
Trying to identify red flags or trends in a company’s financial statements and public disclosures is a monumental task. The lengthy, and often opaque, nature of financial reporting makes the process of trying to thoroughly screen a company’s disclosures, or … Continue reading
Benford’s Law as a Quality of Reporting Indicator
There are several different tools and mathematical formulas that can be utilized to determine the strength of a company’s financial statements. One of the most intriguing and useful tools to detect accounting irregularities is the mathematical formula Benford’s Law – … Continue reading
An Overview of 17 Years of Changes in Accounting Estimates
Launched back in 2013, the Audit Analytics Changes in Accounting Estimates database now has nearly 18 years worth of changes in accounting estimate disclosures. We’ve analyzed all annual and quarterly SEC filings going back to January 1, 2000. We have just … Continue reading
Predicting Material Weakness
Audit Analytics has released a white paper, Predicting Material Weakness, which discusses how certain company events and disclosures—such as late filings, auditor changes, or CEO / CFO departures—can be used to predict the probability that the company will also have … Continue reading