The use of the Beneish Model in detecting financial information manipulation: A practise on BİST 100 index

Human beings have used their incomes in different investments in order to meet their infinite demands with their scarce resources. With developing technology and internationalization of capital, capital markets have become a significant investment tool for people. Capital markets which gather companies in need of capital and capital owners play a crucial role in maximizing the benefits for both groups. Financial information manipulation in capital markets refers to the intervention in the financial reports by specific entities who intend to take advantage of this situation by misleading financial information users while making their decisions. The purpose of this study is to clarify the concepts of financial information manipulation with its goals, methods, and practices and to reveal whether the companies in the Borsa Istanbul 100 Index engaged in financial information manipulation in 2021 and 2022. To this aim, The Beneish Turkey Model created by Küçüksözen based on Beneish's 1999 Model and Probit Analysis Method were used. The analysis was conducted on a total of 72 companies, including 65 control group companies listed on the Borsa Istanbul 100 Index and meeting the data set requirements of the model, and 7 manipulator group companies that were engaged in financial information manipulation in 2021-2022 and declared to the public through the weekly bulletins of the Capital Markets Board (SPK). The results of this research indicate that the predictive power of the model for financial information manipulation was 86% and 100% in the manipulator and control group companies, respectively. Keywords: Financial Information Manipulation, Beneish Model, Borsa Istanbul, Probit Analysis, K-Means Clustering, Creative Accounting