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Assessing the Integrity of Financial Reporting in Romanian Real Estate Companies: an Integrated Approach Based on Statistical Models

Author

Listed:
  • Tatiana Dănescu

    (George Emil Palade University of Medicine, Pharmacy, Science, and Technology of Targu Mures, Romania)

  • Alexandru Diana-Karina

    (Blu Accounting Society, Bucharest, Romania)

Abstract

In a global economy characterized by accelerated digitalization and increasing pressure for financial performance, fraud has evolved from an isolated misconduct into a systemic risk that threatens market confidence and stability. The real estate sector has become progressively more exposed, owing to the complexity and magnitude of its investments. This research conducts an in-depth examination of the financial fraud risks inherent to this sector by employing established detection models—the Beneish Model, Benford’s Law, and the Chi-Square Test—alongside the development of a proprietary model adapted to the specificities of the real estate market. The findings underscore the imperative for rigorous corporate governance mechanisms and for an organizational culture rooted in transparency and integrity. The study proposes an integrated analytical framework designed to enhance the effectiveness of fraud prevention practices within the real estate industry.

Suggested Citation

  • Tatiana Dănescu & Alexandru Diana-Karina, 2025. "Assessing the Integrity of Financial Reporting in Romanian Real Estate Companies: an Integrated Approach Based on Statistical Models," Acta Marisiensis. Series Oeconomica, "George Emil Palade" University of Medicine, Pharmacy, Sciences and Technology of Târgu-Mureș, România - Faculty of Economics and Law, vol. 1, pages 59-72, December.
    • Handle: RePEc:pmu:oecono:v:1:y:2025:p:59-72
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    References listed on IDEAS

    as
    1. Mihaela-Maria Mihalcea, 2020. "Detecting the Risk of Manipulation of Financial Statements for Companies on the Bucharest Stock Exchange Applying the Beneish Model," Book chapters-LUMEN Proceedings, in: Carmen NÄ‚STASE (ed.), 16th Economic International Conference NCOE 4.0 2020, edition 1, volume 13, chapter 17, pages 182-193, Editura Lumen.
    2. Messod D. Beneish, 1999. "The Detection of Earnings Manipulation," Financial Analysts Journal, Taylor & Francis Journals, vol. 55(5), pages 24-36, September.
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    Keywords

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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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