We evaluate the creditworthiness of banks using statistical, as well as combinatorics-, optimization-, and logic-based methodologies. We reverse-engineer the Fitch risk ratings of banks using ordered logistic regression, support vector machine, and Logical Analysis of Data (LAD). The LAD ratings...

This paper explores the possibility of sharing firm-level information within an audit firm in a privacy-preserving manner and demonstrates the benefits of doing this, under the assumption that the same audit firm serves multiple clients competing in the same industry. We observe significant...

The central objective of this paper is to develop a transparent, consistent, self-contained, and stable country risk rating model, closely approximating the country risk ratings provided by Standard and Poor's (Samp;P). The models should be non-recursive, i.e., they should not rely on the...

Absent regulatory requirements, 64% of small private commercial banks voluntarily procured an independent audit in our dataset. Hence, it can be argued that an independent audit may have a perceived value. In our study, we examine whether the decision to procure an audit is systematic. First, we...

The objective of this paper is to examine the relationship between an independent audit and financial reporting conservatism in the small private commercial bank setting. We use the timely recognition of probable losses and the minimal use of discretionary accruals as proxies for conservatism....

Capital IQ's Compustat database is commonly used in empirical accounting research. Numbers that appear in Compustat are standardized to ensure "...consistent and comparable data across companies, industries and business cycles..." However, there has been no evidence in the academic literature...

Compustat accounting database is frequently used for both research and decision-making. However, the accuracy and value of the information extracted from Compustat depend not only on the methods used to extract that information, but also on the validity of the data provided by Compustat. It has...

This paper introduces an approach to the assessment of financial statement fraud risk and audit program planning and illustrates its application by simulating its use in the 1999 audit of Olympus. The approach incorporates a rigorous approach to assessing risk and current standards and...

The primary purpose of this paper is to advance research in internal audit (IA) evaluation by developing an IA assessment model that considers interrelationships among specific factors used by external auditors when evaluating the strength of the IA function. The model is built on three factors...

This article presents an overview of the textual analysis of companies’ regulatory filings. More specifically, it provides a discussion on readability indices, and new developments in this area of research. Next, the article discusses six different risk sentiment metrics, one by Feng Li (2006)...