Abstract

MACEDO, Paulo Sérgio Gomes; INACIO, Helena Coelho  and  VIEIRA, Elisabete S.. A model to detect financial statement fraud in portuguese companies by the auditor. Contad. Adm [online]. 2022, vol.67, n.3, 00008.  Epub June 06, 2023. ISSN 0186-1042.  https://doi.org/10.22201/fca.24488410e.2022.2987.

This study developed a model that can be used to differentiate between fraudulent and non-fraudulent reports and helps the auditor to identify and assess material misstatement risk due to fraud. This model was based on the three stages of the fraud triangle, as well as on the agency theory and stakeholder theory. To develop the model, we used a sample that consists on a group of Portuguese companies that show evidence of fraud and another group of companies without evidence of fraud. Logistic regression results showed a positive relation between fraudulent financial statements and: companies need of higher financing, that represented the pressure to commit fraud; operations ineffectiveness, when the relative weight of accounts receivable is greater when compared to assets, which constituted the opportunity to commit fraud; and higher management turnover, which was characterised by managers who showed predisposition to commit fraud (rationalisation).

Keywords : financial statements; fraud; auditor; Portugal.

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