Patent ID: 8234200

Claim:
A computer-implemented method for evaluating investment risk due to accounting misstatements comprising: receiving a selection of categories, subcategories corresponding to each category, and characteristics corresponding to each subcategory, the identity of a company within a portfolio of companies for evaluation, and financial accounting data, including accounting misstatement data, associated with portfolio components; determining, iteratively, for each company in the portfolio, historical characteristic risk scores derived from the financial accounting data; calculating, iteratively via the computer, for each subcategory, evaluated company subcategory risk ranks through application of (1) determined characteristic risk ranks indicative of the historical characteristic risk scores compared with portfolio components and (2) derived characteristic weights that reflect historical correlation of the characteristics with the accounting misstatement data to a characteristic weighted function; calculating, iteratively via the computer, for each category, evaluated company category risk ranks through application of (1) calculated subcategory risk ranks and (2) derived subcategory weights that reflect historical correlation of the subcategories with the accounting misstatement data to a subcategory weighted function; and generating a comparative categorical investment risk assessment indicator for the evaluated company derived from the calculated category risk ranks.