Financial Statement Fraud Detection - Applicable of Dechow F-score in China

This study focuses on the effectiveness of the Dechow F-SCORE model in monitoring financial fraud in the Chinese financial market. At the same time, the research also aims to thoroughly evaluate the advantages and deficiencies of the F-SCORE model. To implement research, six pairs of listed companies have been selected from different industries, and each company includes a company that has been involved in financial fraud cases and a company that has not had financial fraud. The annual report data of these companies conducted a comprehensive analysis in the vertical and horizontal directions. However, the results of the study show that when the F-SCORE model is applied to compare the financial fraud of these companies, the results are not noticeable. The results of the data analysis show that the F-SCORE model does not seem to detect financial fraud in Chinese-listed companies effectively. The conclusion of this study pointed out that the application of the F-SCORE model in Chinese listed companies is limited, and it may require more improvement and customization to adapt to the exceptional circumstances of the Chinese financial market. This also emphasizes that financial fraud monitoring involves various methods and tools to meet the needs of different regions and markets.