How to detect fraudulent companies?
some pointers
1.Avoid management that cut corners. A serious reading of ARs , account statements, auditors reports and auditors qualified notes to accounts greatly help in this aspect.
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some pointers
1.Avoid management that cut corners. A serious reading of ARs , account statements, auditors reports and auditors qualified notes to accounts greatly help in this aspect.
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2.High debt, quantum of tax paid in relation to profits earned is a good indication. Higher the tax , better the genuineness of management.
3.Companies which are close to political powers are more likely to cheat.
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3.Companies which are close to political powers are more likely to cheat.
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4.Companies which are more visible with lots if PR should be seen with caution than a low-profile company.
5. focus on Cash flows. If cash flow is not aligned to operating profit, accounting issues are a possibility
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5. focus on Cash flows. If cash flow is not aligned to operating profit, accounting issues are a possibility
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