Financial Statement Fraud and Bankruptcy Risk in Listed Manufacturing Firms in Vietnam: Empirical Analysis Using the M-Score and Z-Score Models

Abstract

This study investigates the relationship between financial statement fraud and bankruptcy risk among manufacturing firms listed on Vietnam’s stock exchanges during the 2019–2023 period. Using the Beneish M-Score and Altman Z-Score models, the research aims to assess the reliability of pre-audit financial statements and evaluate the financial health of firms to detect potential manipulation and predict financial distress. Based on a dataset of 150 firm-year observations, empirical results show that 84% of firms exhibit high reporting reliability, while the proportion of firms with potential fraud risk has increased in recent years. The Beneish M-Score correctly classified 53.94% of observations, confirming its partial effectiveness in detecting financial statement manipulation, whereas the Altman Z-Score achieved a 55.33% accuracy rate, indicating moderate predictive power for financial distress. The correlation analysis revealed no statistically significant relationship between M-Score and Z-Score (r = –0.02, p = 0.806), suggesting that fraudulent reporting does not necessarily translate into imminent bankruptcy risk. The findings imply that these two models capture different dimensions of corporate risk—reporting integrity and financial stability—and should be applied complementarily rather than interchangeably. The study contributes to the literature by providing empirical evidence from an emerging market and offers practical implications for auditors, investors, and regulators in strengthening financial transparency and early warning systems for corporate risk management in Vietnam