Application of Financial Ratios to Predict Financial Restatement Enforcement: Financial Statement Fraud Signal
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Abstract
The objectives of this research are to investigate the relationship between financial ratios and financial statement fraud and apply such results to further develop a forecasting model to detect financial restatements enforcement. Using a sample group of companies listed on the Stock Exchange of Thailand between 2011 and 2020, the results show that liquidity and asset turnover ratio are positively related to financial statement fraud. Contrarily, fixed asset turnover ratio is negatively related to financial statement fraud. Such relationships are used as a model to evaluate the effectiveness in predicting companies that are enforced to restate their financial statements. The results indicate that, based on a model built on 3 statistically significant ratios, the liquidity ratio model is the best at predicting companies that are forced to restate their financial statements. The model can predict 35.29% (75th percentile criteria). Next is the asset turnover ratio model, which can predict at 29.41% (75th percentile criteria). Finally, using the fixed asset turnover ratio, the model can detect 25.53% (25th percentile criteria).
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ลิขสิทธิ์ของบทความ
ผลงานที่ได้รับการตีพิมพ์ถือเป็นลิขสิทธิ์ของมหาวิทยาลัยหอการค้าไทย ห้ามมิให้นำเนื้อหา ทัศนะ หรือข้อคิดเห็นใด ๆ ของผลงานไปทำซ้ำ ดัดแปลง หรือเผยแพร่ ไม่ว่าทั้งหมดหรือบางส่วนโดยไม่ได้รับอนุญาตเป็นลายลักษณ์อักษรจากมหาวิทยาลัยหอการค้าไทยก่อน
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