Balance indicators analysis in forensic accounting

Abstract

A well-known set of analytical methods that are used to make forensic accounting related to insolvency of economic agents do not assess the enterprises operating in different sectors of economy efficiently. Also a lack of public data sufficient for generalization complicates the studies in this field. In this context the research presents the method of modeling balance sheet indicators under the given condition and the method of calculating the average financial ratios for assessing the financial condition of the enterprise of the energy industry considering the peculiarities of this sector of economy. The methodology suggests the following stages: 1) to determine key performance and financial characteristics typical for the sector; 2) to select the most significant financial indicators for the sector; 3) to develop new financial indexes typical for the sector under consideration; 4) to calculate their average values using reporting data of enterprises that are considered to be the analogues of the objects of economic expertise; 5) to assess the dynamics of financial indexes of the objects of expertise in relation to the industry values. For the calculations the author used the materials of the energy industry obtained on the basis of special requests. To assess the financial condition of the author in the course of the study justified and calculated new industry financial ratios that reflect the specifics of energy companies - objects of economic expertise. The ratios are the share of receivables and the share of costs on the fixed assets restoration. To assess the potential solvency of enterprises in the work justified and illustrated the method of modeling reporting under specified conditions of debt repayment. The practical results of the work can be used for the production of forensic accounting on the possibility of avoiding non-payment of wages by the enterprise or on the availability of the possibility of covering existing debts in a timely manner, on the compliance of economic and financial indicators with the industry value in the course of the analysis of financial statements, including in the framework of cases of illegal bankruptcy. The proposed approaches will improve the objectivity and validity of expert conclusions in assessing the financial condition of enterprises. In addition, the proposed financial ratios can be used by economists of the energy industry to assess the dynamics of the financial condition of such enterprises, and the described approach to the justification of industry indicators can be taken by scientists as a basis for the development of specific financial indicators of other industries.

Keywords

forensic accounting, economic analysis, financial statements, assessment of a financial statement, modeling of balance indicators, enterprises of energy sector, solvency, bankruptcy

For citation

Pashchenko Т.V. Balance indicators analysis in forensic accounting. Perm University Herald. Economy, 2018, vol. 13, no. 3, pp. 468–481. DOI 10.17072/1994-9960-2018-3-468-481

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