Weighty annual reports could suggest fraudulent accounting

The amount of topics that accounting firms discuss in their annual reports has a direct relationship to intentional financial misreporting, new research has found.

An algorithm has been developed by Associate Professor Nerissa Brown, from the University of Delaware, which measures how many topics are being discussed in accounting firms’ annual reports.

The study found firms that engage in fraud discuss more topics in their annual reports than firms that do not misreport.

Read more at University of Delaware