From the article "Are Auditors and Audit Committees Lower Fraud Risk by Constraining Inconsistencies between Financial and Nonfinancial Measures"? Written by Brazil, Joseph

Describe the statements and findings the author makes in this article. How are they relevant for auditors? Explain 5 examples for nonfinancial measures. Try to find and name financial statement fraud cases in which nonfinancial measures were critical in exposing the fraud.

Accounting researchers have found a highly successful way to detect companies engaging in financial statement fraud via a comparison of financial and nonfinancial (e.g. square feet of sales locations, number of employees, number of warehouses) measures. Why are managers engaging in financial statement fraud not manipulating both types of numbers? Is the method described by Brazel superior to AS 2401 (Consideration of Fraud in a Financial Statement Audit)?