Exhibit 5 presents the variables and Beneish’s M -Score for XYZ Corporation (a hypothetical company).

1. Would the results of the Beneish model lead an analyst, using a –1.78 M -score as the cutoff , to flag XYZ as a likely manipulator?

2. The values of DSR, GMI, SGI, and DEPI are all greater than one. In the Beneish model, what does this indicate for each variable?

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EXHIBIT 5 XYZ Corporation M-Score Value of Variable 1.300 1.100 0.800 1.100 1.100 0.600 0.150 0.600 DSR GMI AQI SGI DEPI SGAI Accruals LEVI Intercept M-score Probability of manipulation Coefficient from Beneish Model 0.920 0.528 0.404 0.892 0.115 -0.172 4.670 -0.327 Calculations 1.196 0.581 0.323 0.981 0.127 -0.103 0.701 -0.196 -4.840 -1.231 10.91%