Question

What is the Beneish Model?

A. A tool that assesses the probability of risk of statement manipulation
B. A tool that allows you to run an analysis on a set of numbers to determine if they follow a predicted pattern
C. A regression analysis that estimates what earnings would be without any manipulations
D. A model that identifies outliers in a dataset

Answer 1

The Beneish model is a mathematical representation of financial functions to validate if there is a trace of monetary manipulation on earnings reports. Therefore, response A is correct.

Explanation:

Option A Is the correct response since the goal is to find the manipulation of statements.

Option B is considered a trend analysis.

Option C is considered a regression analysis.

Option D is defining statistical tools such as scatterplot graphs, normality plot, box plots, among others created to identify outliners in datasets.