Hello Researchers,
I am just confused in the last step of the calculations of F-score model for detecting Accounting Misstatements.
Step: 01 - For calculating F-Score (Find Predictive Value)
Predicted Value (PV) = -7.897 + 0.790 (rsst_acc) + 2.518(ch_rec)+1.191(ch_inv)+1.979(soft_assets)+0.1 71(ch_cs)+ (-0.923)(ch_roa)+1.029(issue)
Step: 02 - For calculating F-Score (Find Probability Value)
Probability = e^pv / (1+ e^pv)
Where e = 2.7183
Step: 03 - For calculating F-Score (unconditional expectation / unconditional probability)
unconditional probability = The number of misstatement firms / the total number of firms
Final Step:
F- Score = 2nd Step Value / 3rd Step value.
I have done first and second step successfully, but I am confused about 3rd step, how I knows or identify, whether the firm is misstatement firms or not. Need guidance regarding this matter. Thanks
I am just confused in the last step of the calculations of F-score model for detecting Accounting Misstatements.
Step: 01 - For calculating F-Score (Find Predictive Value)
Predicted Value (PV) = -7.897 + 0.790 (rsst_acc) + 2.518(ch_rec)+1.191(ch_inv)+1.979(soft_assets)+0.1 71(ch_cs)+ (-0.923)(ch_roa)+1.029(issue)
Step: 02 - For calculating F-Score (Find Probability Value)
Probability = e^pv / (1+ e^pv)
Where e = 2.7183
Step: 03 - For calculating F-Score (unconditional expectation / unconditional probability)
unconditional probability = The number of misstatement firms / the total number of firms
Final Step:
F- Score = 2nd Step Value / 3rd Step value.
I have done first and second step successfully, but I am confused about 3rd step, how I knows or identify, whether the firm is misstatement firms or not. Need guidance regarding this matter. Thanks
