Our accounting risk assessment is based on the output of nine 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 48% of all companies) and rises through medium (38%), high (11%) to very high risk (3%). For a company to be classified as a low accounting risk it must not only populate all nine models, but not trigger any of them; meanwhile, very high-risk companies will generally trigger three models or more.

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