Our accounting risk assessment is based on the output of ten accounting models designed to detect profit manipulation, window-dressing or financial stress. In general, accounting risk increases as the number of models triggered rises, subject to a few caveats. Our risk rating starts at low risk (triggered by 37% of all companies) and rises through medium (41%), high risk (15%) and very high risk (6%). For a company to be classified as a low accounting risk, it must not only populate all ten models, but not trigger any of them; meanwhile, very high-risk companies will generally trigger three models or more.
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GMT Research is an accounting research firm which develops proprietary methodologies to detect financial anomalies, or traits similar to past accounting shenanigans, at publicly listed companies. It is based in Hong Kong, focused on Asia and regulated by Hong Kong’s Securities and Futures Commission. The firm advises investment institutions around the world. For more information please visit our Terms of Use or About Us pages.