Detecting the probability of financial fraud due to earnings manipulation in companies listed in Athens Stock Exchange Market

Purpose The aim of this paper is to detect whether there are companies listed in the general index of Athens Stock Exchange Market that possibly conduct earnings manipulation during 2017–2018. Design/methodology/approach The paper is based upon the Beneish model (M-score), which consists of eight variables to examine the probability of financial statement fraud related to earnings manipulation for 40 companies listed in the Athens Stock Exchange Market. Any company with an M-score −2.22 or above is likely to be a manipulator whereas any company that scores −2.22 or less is unlikely to conduct earnings manipulation. Findings After calculating the M-score for each company, it was found that 33 (out of 40) companies had M-score values lower than −2.22. Therefore, 82.5% of the sample is considered rather unlikely to conduct earnings manipulation whereas 17.5% of the companies listed in the general index of Athens Stock Exchange Market is likely to manipulate its earnings. Research limitations/implications In this paper, all institutions related to financial services were left out of the sample because of the fact that M-score cannot provide reliable results when applied on similar companies. Originality/value Beneish model offers a probability of financial fraud and can be therefore used as a supplementary test for auditors, fraud examiners or even national regulators such as the Hellenic Accounting and Auditing Standards Oversight Board or the Hellenic Capital Market Commission. The results of this paper can contribute to the literature concerning financial fraud in Greece during 2017–2018 because no relevant recent researches have been published yet.

Financial Implications of Capital Controls Enforcement on Large-Cap Companies Listed on the Athens Stock Exchange

The aim of this study is to examine the effects of the capital controls on the process and financial performance of large-cap companies operating in Greece listed on the Athens Stock Exchange. More specifically, the markets’ behavior is studied, as well as the reactions of the investors after the announcement of the implementation of the measure. The mixed method (quantitative research with questionnaires and qualitative research with interviews with financial managers and senior executives) was used. The main findings of the research are that the measure of capital controls: was deemed necessary and effective based on its aims, which were (a) the protection of the mass withdrawal of deposits and (b) the stabilization and security of the financial system had a significant effect on increasing the use of electronic banking. But also had significant negative effects: on the investment decisions of companies, on their competitiveness and reputation abroad, on the ability to raise new capital, on their liquidity and therefore on their ability to cope with key functions, as well as on their imports and exports. Keywords: Capital controls, listed large-cap companies, crisis, Athens Stock Exchange, Greece.

The impact of corporate governance on earnings management: Evidence from Greek listed firms

In this paper, we investigate whether the characteristics of boards of directors are associated with earnings management. By employing a sample of listed firms in the Athens Stock Exchange during the period from 2008 to 2016 and applying two different earnings management models (Dechow’s ’96 and DeAngelo’s ’86) to explore, via the discretionary accruals, for the presence of earnings management, we surprisingly found no evidence of almost any effect of the investigated board characteristics, except CEO duality. Besides, we also found significant variation over time. This finding confirms the unpresented effect of the sovereign debt crisis on Greek firms. The corporate governance legal framework has been improved since the mandatory adoption of the International Accounting Standards, at least from the listed firms in the Athens Stock Exchange in 2005. Under the new rules, more detailed corporate governance information is included in the firms’ financial reports during the last decade.

The Link between Board Structure, Audit, and Performance for Corporate Sustainability

The economic and social transformations, the bankruptcies recorded, and the financial crisis affecting all economies have increased the interest for the corporate governance concept. Our intention in this paper was to study the impact of corporate governance attributes on performance given the information published by the entities listed on five stock exchanges from Europe, namely the main market from Bucharest Stock Exchange (BSE) in Romania, the Athens Stock Exchange(ATHEX) main market in Greece, Financial Times Stock Exchange 100 Index (FTSE 100) from Great Britain, Spanish Stock Exchange 35 Index (IBEX 35) from Spain, and Warsaw Stock Exchange 20 Index (WIG 20) from Poland, between 2016–2018. Through mathematical modeling and multiple linear regression, we aimed to determine the extent to which corporate governance characteristics, firm characteristics, industry and stock market fixed effects, and random effects influence the performance of 226 entities included in our sample. The empirical findings revealed that CEO duality, the number of non-executive directors and women on board, audit committee, and audit opinion influenced performance measured by the Return on Assets (ROA) and Return on Equity (ROE) indicators. The ideas highlighted and the results obtained in this research contribute to the literature that analyzes the extent to which an effective governance determines the increase in performance, needed for a sustainable development.