An investigation into balance sheet manipulation: Application of the Beneish model to technology companies in Borsa Istanbul

Companies may perceive the flexibility in generally accepted accounting principles and standards, as well as the gaps in regulations, as an opportunity to engage in balance sheet manipulation, misleading participants in the capital markets by choosing the path of financial statement distortion. The alteration of all financial statements in order to obscure the manipulated financial information makes it significantly challenging to trace the manipulation in the financial statements. The aim of this study is to determine whether technology companies resort to manipulation. Beneish's model, adapted to Turkey by Cemal Küçüksözen, was employed as the research method. The data used in the study were obtained from the financial statements publicly disclosed by technology companies listed on Borsa Istanbul (the Istanbul Stock Exchange) between 2018 and 2021, which were accessible on the Public Disclosure Platform (kap.org.tr). The data were analyzed using Microsoft Excel and IBM SPSS Statistics version 23. The probability of these companies engaging in balance sheet manipulation was observed by categorizing them as "Star Market" and "Main Market." Out of a total of 31 technology companies, 15 were excluded from the analysis due to data insufficiency or anomalies, and the remaining 16 companies were included in the study, with the Mi value calculated. The calculated Mi value was interpreted in four stages to determine whether the companies resorted to balance sheet manipulation.