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Strategies & Market Trends : Value Investing

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To: Micah Lance who wrote (57053)	3/22/2016 8:33:34 PM
From: Spekulatius	4 Recommendations Read Replies (3) of 78748

There are many telltale signs of accounting frauds, and while it often not possible to know if it is a fraud for sure, these telltale signs can indicate increased risk: 1) Rapidly increasing and complex balance sheet and income statement 2) Balance sheet and income statement out of whack with industry metrics 3) Rollups 4) agressive management, strong incentives for growth, stock price 5) use of non GAAP metrics, which tend to have a huge gap to GAAP metrics 6) Increasing debt A recent example is VRX. The more signs you see of the above, the higher the risk.

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