Chartered Financial Analyst Level 2
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An analyst gathers the Beneish model M-scores below and uses a −1.78 M-score cutoff.
| Company | Current Year | Prior Year | Change in M-score |
|---|---|---|---|
| Company 1 | −2.00 | −2.25 | 0.25 |
| Company 2 | −1.50 | −1.25 | −0.25 |
| Company 3 | −2.25 | −2.00 | −0.25 |
Based on this information, which company has the highest probability of earnings manipulation?