Failing the sniff test: Researchers find new way to spot fraud

Courtesy EurekAlert! - Mathematics and Statistics  Sun, 11/08/2009 - 23:00

(North Carolina State University) Companies that commit fraud can find innovative ways to fudge the numbers, making it hard to tell something is wrong by looking at their financial statements.

But a new warning system sees through accounting tricks by evaluating things that are easily verifiable, such as the number of employees or the square footage a company owns.

If a company says its profits are up, but these nonfinancial measures are down, something is wrong.

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