Data manipulation in the financial statements of companies listed on the Warsaw Stock Exchange – Evaluation of the effectiveness of the Beneish model
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June 28, 2024
September 11, 2024
Abstract
The article presents the results of research aimed at verifying the effectiveness of the Beneish model on the Polish capital market. The efficacy of the Beneish model was evaluated for its 8 and 5‑index forms using the ROC curve and the confusion matrix. All three limit values of the model, i.e. –2.22, –1.99, and –1.78, were checked, the exceeding of which is a signal of potential data manipulation in the financial statements of issuers from the Polish stock market. The research covered data from 231 financial statements of companies listed on the WSE Main Market and NewConenct. In the research topic undertaken, the previous analyses using data from the Polish market did not include such a large research sample. The research results showed that in Polish market conditions, the 5‑indicator variant of the Beneish model is characterised by higher efficiency than its 8‑element version. The main practical implication of the study is the verification of one of the most well-known models for detecting data manipulation under financial statements in Polish market conditions.
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