Articles: Department of Business

Permanent URI for this collection

http://repository.embuni.ac.ke/handle/123456789/287

Browse

Browsing Articles: Department of Business by Subject "Beneish Model"

Now showing 1 - 2 of 2
  • Thumbnail Image
    Item
    Earning Management: Analysis of Non-Banking Firms Listed in Nairobi Securities Exchange using Beneish M-Score and Altman Z-Score
    (2021-02) Nyakarimi, Samuel N.
    Earning management or manipulation has been that has been used for a long time by the management of various firms to adjust financial reports to meet certain objectives. This practice has been used even for fraudulent and selfish activities. The purposes of the research were to ascertain the levels of earning manipulations and financial distress of non-banking firms listed in Nairobi securities exchange. The latest financial statements were used as the source of information. The Beneish five-variable model was used to determine the presence of earning manipulations. Altman’s Z-Score was used to test the financial distress. The analysis revealed that 58.3% of the firms were not involved in earning manipulations. Further data showed that 41.7% of the analysed firms were in financial distress. The study recommends restitutions by fraud perpetrators through earning manipulations, change of auditors approach to certification of financial reports by including ratios calculations and financial bailout by the government and owners of the businesses in case of financial distress based on economic hardships.
  • Thumbnail Image
    Item
    Financial Statements Manipulations Using Beneish Model and Probit Regression Model. A Case of Banking Sector in Kenya
    (2020-03) Nyakarimi, Samuel N.; Kariuki, Samuel N.; Kariuki, Peter
    The main objective of the study was to establish whether the banks in Kenya were involved in financial statement manipulations. The study involved all the banks registered and operating in Kenya and whose financial statements are published for public consumption. Beneish five-variable model was first used to categorize the banks as likely non-manipulators and likely manipulators. The probit regression model was used to determine non-manipulators and manipulators based on the averages derived from non-manipulators using Beneish five-variable model. The results obtained showed that 78.8% of all banks were not involved in financial statement manipulations while 21.2% were involved in financial statement manipulations. The study concluded that some banks that were involved in financial statement manipulations. The study recommended that both internal and control auditors should compute individual indices to determine whether the preparers of financial statements were involved in manipulations. Further it was recommended that the organizations should enhance and strengthen the ICS to seal the loopholes utilized in financial statement manipulations.