Financial statement manipulation in failing Small and Medium-Sized Enterprises in Bosnia and Herzegovina

The overall objective of this research is to analyze the financial condition failing companies prior bankruptcy, in comparison with non-failing companies, which are matched on industry, size, and time-period. sample consists 168 SMEs from wholesale retail whose statements were analyzed for 2011-2015 period. analysis primarily based ratio models developed bankruptcy prediction statement manipulation. Mann-Whitney U test used compare differences between a set twenty variables. Research findings indicate that there significant difference SMEs, especially accruals, asset quality, leverage, profitability, liquidity. For very first time transition economy CEE Bosnia Herzegovina, pre-bankruptcy behavior analyzed, providing insights into potentially manipulated areas, represent main contribution research.