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AUTHOR(S): Mirela Miti, Edison Zaçaj
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ABSTRACT Business development plays a vital role in economic development, so the effective and efficient management of activities carried out by businesses is to a great importance. But their identification in financial reports are also object of fraud activities, a phenomena which is turning into a headline of the day, especially for developing countries and also in Albania. Accounting professionals who are directly responsible for the preparation of the reports must use the principles and techniques of Forensic Accounting which help them to investigate legitimate financial activity and conduct due diligence reviews to properly assess the activity of economic entities. This paper identifies the importance of financial statement analysis tools and techniques in this process, being identified as Fraud Indicators of financial statements indicators. In the study have been taken into consideration the financial statement of 70 SMEs that carry out commercial activity and that through financial statements reports it was studied how “red flags” can be identified in financial reporting indicators to further investigate whether fraud conditions are met or not. Data analysis showed that there was a significant statistical relationship between liquidity and performance indicators, which serve as a starting point for going into further use of technical forensic accounting techniques by professionals. |
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KEYWORDS Financial Statement Analysis, Profitability, Solvency, Small and Medium Enterprises (SMEs), Forensic Accounting |
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Cite this paper Mirela Miti, Edison Zaçaj. (2024) Using Financial Statements Analysis as a tool on identifying the solvency of SMEs and its relation with Forensic Accounting; Evidence from Albania. International Journal of Economics and Management Systems, 9, 31-45 |
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