Forensic Accounting

Lessons

• What Earnings Actually Are8 min read · Accrual accounting vs cash: why net income and operating cash flow diverge by construction, and
• Why ROE Alone Lies — the DuPont Decomposition9 min read · Return on equity is three businesses in one trenchcoat: margin, asset efficiency, and leverage.
• The Accrual Anomaly — Sloan's Discovery7 min read · In 1996, Richard Sloan documented that firms with high accruals systematically underperform.
• The Altman Z-Score, Coefficient by Coefficient10 min read · Five ratios, five weights, three zones. How Edward Altman built bankruptcy prediction from 66
• The Beneish M-Score — Eight Indices of Manipulation10 min read · Messod Beneish modeled the fingerprints of firms later caught manipulating earnings.
• What Screens Cannot See7 min read · Every quantitative screen reads the statements as filed.
• The 12-Item Earnings-Quality Checklist8 min read · The practitioner's working list — twelve patterns that precede most restatements, each mapped to
• Case File: WorldCom — Reading a Collapse in Real Time9 min read · The largest accounting fraud of its era, replayed statement by statement.
• Where Accounting Meets Price7 min read · Markets do price earnings quality — you just have to look at multiples the right way.
• The Full Forensic Workflow — Certify or Reject9 min read · Putting it together: the five-step audit you can run on any ticker in ten minutes, ending in a

Sources

Altman (1968); Beneish (1999); Sloan (1996); company 10-K filings via SEC EDGAR