Accounting manipulation is more widespread than many realize

41%

of public US firms misreport their financial accounts materially, destroying US$830B of equity value every year

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US$1T

is a conservative annual estimate lost to accounting manipulation worldwide based on the amount lost in the US alone

Source

10X

losses at risk without accounting for private companies and debt losses, as estimated by our Risk Engine

the challenge

External auditors only detect wrongdoing 3% of the time

Despite the existence of long-standing systems, identifying accounting manipulation remains challenging, with only a small percentage of fraud cases detected early enough to prevent financial damage. A more effective solution is needed.

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We changed the game with AI

At Transparently, we’ve reimagined financial analysis

Our solution can analyze decades worth of financial statements of thousands of companies in seconds to detect complex accounting manipulation patterns and fraudulent behaviors. That far outpaces traditional analysis.

AI has allowed us to deliver a quantum leap in predictive power and accuracy: The Engine can predict over 90% of collapses up to 3 years before a company's last financial statement is produced. Traditional methods only get it right half the time - even after considering a company’s latest statement.

our technology

AI-powered Transparently
Risk Engine

How it works

Our Engine employs more than 200 models that replicate the practices typically utilised by forensic accountants, short-sellers, equity analysts, credit analysts, and academics. Through different AI techniques, it analyses millions of data points to provide a Rating for each year and a unique accounting risk score (0-100%) for almost every listed company since the early 1990s.
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Most importantly, the Transparently Risk Engine is not a black box. The system provides a full explanation of the red flags detected, consolidating the output across 14 clusters of characteristics for easy analysis.

Delivering actionable insights with Luca

Luca is a forensic accounting GenAI assistant built on top of Transparently's proprietary Risk Engine. It enhances traditional financial analysis by providing a user-friendly chat interface that allows users to ask questions that dig deeper into Transparently’s insights.

Plot a chart of the history of Novela Automotors’ risk score compared with the average risk score for the automobile industry
Here’s the industry comparison for Novela Automotors:
I am a portfolio manager. What is the most important area of Novela Automotor’s accounts that I should investigate?
The top area to investigate is Business Manipulation. There is significant unusual inventory activity. Investigate sales and production activity to determine the nature and risk posed by these changes.
Let me know if you'd like more detail on Novela Automotor's accounts, including other risk areas.

Luca can instantly adopt different job functions to support your analysis

Luca can generate tailored actionable insights based on our Engine’s assessments of a company’s accounting quality. Context can be added easily through news, on-demand charts and tables, and detailed data points.

Read more about Luca
I am a portfolio manager. What is the most important area of Novela Automotor’s accounts that I should investigate?
The top area to investigate is Business Manipulation. There is significant unusual inventory activity. Investigate sales and production activity to determine the nature and risk posed by these changes.
Let me know if you'd like more detail on Novela Automotor's accounts, including other risk areas.
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