How can you tell a company is a fraud?
I have been reading through a lot of discussion boards about CCME being a fraud and it goes like this:
Longs: They are not a fraud, they have Deloitte
Shorts: So what, Enron Has Arthur Anderson, and SAY had PWC. Any company can be a fraud with a top 4 accountant.
So, if any company can be a fraud, other than stuff listed in financial shenanigans, how can you tell if a company is grossly overstating its earnings? It doesn't seem there is a way to tell, so it seems ridiculous to have such high convictions that a company is or is not a fraud. How do I know Exxon isn't a fraud other than its sustainable dividend? Etc. Anything to look for besides the obvious? If a company doesn't raise any red flags but reports a billion more in proft than it made, how can you know?