At this level, the data provided will be aimed primarily at measuring the risk of economic and financial crime of a company in the market, for the strict needs required by these economic entities. We want to apply statistical methods to calculate a score that measures the risk of fraud of an economic entity. This score is intended to be determined by the specifics of Romanian companies and can be used successfully by financial consulting companies in the activities they lead. In foreign literature, such fraud scores are calculated (M score developed by Beneish, Qtest developed by Putman et al. (2005), Piotroski F-Score, etc.), models that we want to apply for Romanian companies. However, a model really proves its viability when it is applied and developed on the same economic space.
The sample of the present study consist of 63 non-financial Romanian firms listed on the Bucharest Stock Exchange in the standard and premium category. All the data were hand-collected by examining the disclosures made in annual reports and from the Bucharest Stock Exchange website (www.bvb.ro). The sample covers all the non-financial companies listed on the BSE between the years 2015 and 2020.
We calculate fraud risk as the likelihood of financial statements manipulations using the Beneish model and failure risk of the companies and check about correlations between them.