Description: This case asks students to investigate a real-world question inspired by a U.S. Securities and Exchange Commission (SEC) investigation: Do some companies report their financial results in ways that cause reported EPS to round upward more frequently than expected? Using real financial statement data from Compustat, students calculate diluted EPS, analyze the third decimal digit used in rounding and investigate whether companies report unusually few 4s and unusually many 5s. Students then use ETL processes, visualizations and screening techniques to identify potential red flags, evaluate patterns across time and reporting periods and determine whether the results warrant further investigation. Throughout the case, students apply the analytics mindset while exercising professional skepticism and professional judgment. Solutions are provided in Alteryx, Python and R and are accompanied by how-to videos.

NOTE: To obtain the data used in this case, you will need a Compustat license. See the user guide for additional information. If you do not have a Compustat license, you can use the EYARC mini case, The case of the missing 4. You can also find the mini version of this case on the EYARC Experience platform. 

Suitable courses: Data analytics, Accounting information systems; auditing (external or internal); Financial accounting; Fraud

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