Integrity: A Critical Risk Factor

Audit Integrity was founded in 2002 to develop risk management tools based on a statistical analysis of corporate integrity.

The Audit Integrity Accounting and Governance Risk (AGR®) rating is a forensic measure of the transparency and reliability of a corporation’s financial reporting and governance practices. The focus of AGR analysis is on identifying the measures most highly associated with fraud, and quantifying those risks for interested stakeholders in relation to company stock price, securities litigation, and major restatement probabilities.

Audit Integrity applies over 100 accounting and governance metrics to a company’s publicly-filed information. The resulting calculation produces the AGR, a percentile score ranging from 0 to 100, with corresponding ratings from Very Aggressive to Conservative.

Companies rated Very Aggressive or Aggressive have proven to be much more likely to face class action litigation and financial restatements, and to suffer severe equity loss. Conversely, those companies that have been consistently rated Conservative have been shown to be the most trustworthy.

AGR sgnificantly improves the predictivity of traditional risk models.

The AGR and its underlying metrics are used by regulators, auditors, insurance companies, investment managers, and corporations, and are frequently incorporated in reporting by major financial media.