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
Category Archives: AQRM
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
Benford’s Law Among the Russell 3000
Benford’s Law, an arcane rule from the math books, is making something of a splash in the world of financial analysis. The basic idea is this: in certain sets of data (the lengths of a collection of rivers, the populations … Continue reading
Hain Delays Filing: What to Expect
Hain Celestial Group (NASDAQ: HAIN) announced on Monday, August 15 that it would delay the release of its fourth quarter and fiscal year 2016 financial results. The reason? The company was investigating certain revenue arrangements with distributors. During the fourth quarter, the … Continue reading