Based on the findings in existing research this thesis provides a financial statement analysis model to identify earnings manipulation. The “earnings manipulation indicator model” provided in this thesis is three-pronged. The first part of the model includes the financial statement variables that indicate the actual earnings manipula-tion. The second part of the model contains the internal and external incentive variables that moti-vates the CEO’s earnings manipulation. Since a weak governance structure may facilitate earnings manipulation, the third part of the model includes variables regarding the governance structure. When the earnings manipulation indicator model is applied to the Danish earnings manipulator Memory Card Technology A/S, it strongly and correctly suggests that earnings manipulation has taken place.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||86|