Accounting-Fraud Indicator Signals Coming Economic Trouble

A tool to identify corporate earnings manipulation finds the most risk in over 40 years

The M-Score determines whether a company is engaging in earnings manipulation. Photo: Thapana_Studio/Shutterstock

Manipulation of earnings from Corporate America is on the rise, an ominous omen for the U.S. economy.

That is the conclusion of new research on accounting fraud, using a technique that flagged Enron as an earnings manipulator several years before the energy company’s spectacular 2001 implosion.

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