University of Piraeus. International Strategic Management Association
Abstract
Management sometimes exploits the quest of shareholders for higher return
on equity capital, by taking advantage of accounting rules gaps or violating
them. The Beneish earnings detection manipulation model, is an attempt
to reveal such illegal or at least unethical practices. Evidence regarding
the use of “creative” accounting practices, based on that model, during
the massive equity fund raising in Athens Stock Exchange for the period
1999-2000, are examined. The results of Beneish model are further invigorated
towards that aim, when it is accompanied by the Return on Equity
(ROE) decomposition ratios and Altman’s Z score of bankruptcy prediction.
The model contributes to more efficient allocation of scarce resources.peer-reviewe