Discussing models for identifying the potential for financial reporting fraud: the case of the beneish m-score model and the f-score model

Abstract

Despite numerous efforts to improve the quality of financial reporting, the issue of fraud persists and remains a significant concern. This article focuses on presenting two commonly used models for identifying the potential for financial reporting fraud. Through a case study of the 2023 financial statements of Phuong Nam Cultural Joint Stock Company (PNC), it was observed that conclusions derived from both models were consistent. While these models are highly valuable in detecting the potential for financial reporting fraud, they do have certain limitations. In light of these limitations, the article proposes a set of recommendations aimed at enhancing the quality of fraud detection in financial reporting.