Title: Fraudulent accounting: an inquiry into earnings manipulation in industrial sectors of South Asia

Authors: Brishti Chakraborty

Addresses: Department of Accounting, Mawlana Bhashani Science and Technology University, Santosh, Tangail-1902, Dhaka, Bangladesh

Abstract: Earnings manipulation is a prime concern affecting firms across industries, undermining shareholders' trust and corporate governance. The rapid industrial growth and governance difficulties repeatedly coexist in South Asia. The aim is to detect manipulation using an unbalanced panel dataset and ordinary least squares (OLS) regression, as it can effectively pinpoint significant factors of fraudulent usage and comprehension of statistical significance. Barnish M-M-score model is widely applicable to defect manipulation of prominent, large, and publicly traded companies with complex financial structures and high levels of volatility. The result revealed significant matrices Such as total accrual to total Assets, Gross margin index, asset quality index, and depreciation index, are critical in predicting manipulation; the value of R square is 36.60% with a 1% significance level, indicating a valuable insight into earnings manipulation. The study provides valuable insight into risk management tactics but does not cover all financial ratios or non-financial misconduct.

Keywords: financial fraud; detection; Beneish M-score model; manipulation; South Asia.

DOI: 10.1504/AJFA.2025.146034

American Journal of Finance and Accounting, 2025 Vol.8 No.3, pp.233 - 249

Received: 17 May 2024
Accepted: 24 Feb 2025
Published online: 01 May 2025 *