Resumen
Corporate accruals create a negative impression of management and financial reporting quality. Financial statements (FS) are frequently analyzed using analytical procedures to evaluate operating performance, assets, and liabilities. The objectives of this study are to measure constructs of financial ratios; to examine the linear association between corporate accruals and constructs; and to conduct cross-country analysis. Four constructs such as liquidity, profitability, operating ability, and solvency are measured using confirmatory factor analysis (CFA) on the data collected from eight Asian countries. The principal procedures are Kaiser-Meyer-Olkin (KMO), Bartlett?s test, CFA, Two steps data normalization, and Multiple regression model. The country-wise alpha value demonstrates mixed reactions that indicate managerial opportunistic behavior is not limited to the scope of accounting opportunity for accruals. Findings shows that ratio analysis alone is not sufficient to evaluate FS and users of FS should be aware of other mechanisms such as accounting red flags, financial shenanigans, the reputation of the audit firm, reading of fraud magazine, business news on TV, capital market news, business news from the daily newspaper. business journal and the like. Primary users of FS such as investors, lenders, and creditors should pay attention to make sure the regulator performs his duty with due diligence.Keywords: Fraudulent Financial Reports, Corporate Accruals, Earnings Management, Financial Ratios, International Comparison, Confirmatory Factor Analysis(CFAs).JEL classification: M41, N25, C12