Academics Say Quant Analysis Can Detect Financial Irregularities

As evidenced in the LETS GOWEX SA (OTCMKTS:LGWXY) (BME:GOW) situation, a significant portion of financial statement irregularities are ignored or missed by reporting firms, their auditors, and the SEC. Now researchers say that they have discovered a statistical method to detect financial irregularity reporting. In a paper titled “Financial Statement Irregularities: Evidence from the Distributional Properties of Financial Statement Numbers,” researchers create a composite, red-flag financial statement measure to estimate financial reporting irregularities. The report is authored by Dan Amiram, Columbia Business School – Accounting, Business Law & Taxation; Zahn Bozanic, Ohio State University – Department of Accounting & Management…