After an attempt to measure the “accounting and governance risk” of the financial services companies being bailed out under the Federal Troubled Assets Relief Program (TARP), one research firm is cautioning that many of the bailed-out firms are riskier even that has been publicly disclosed.

Using its methodology, the risk-assessment firm Audit Integrity reports that 82 percent of TARP recipients fall into either its “very aggressive” (52 percent) or “aggressive” (30 percent) categories on its accounting and governance risk (AGR) scale. As a result, the companies have a high statistical likelihood they will restate their earnings and suffer from other adverse events, including regulatory actions, shareholder litigation and bankruptcy, Audit Integrity asserts.

As many as 35 percent of the research firm’s overall universe of more than 7,000 companies fall into these two categories.

“The use of federal money to bail them out should be pause for concern on several levels,” says Jack Zwingli, Audit Integrity’s CEO. “Unfortunately, the odds are that a number of these companies will fail at some level in the future, which raises the concern that the federal government is throwing good money after bad.”

The AGR rating is a forensic indicator of the transparency and reliability of a corporation’s financial reporting, and identifies metrics most associated with financial statement fraud, as measured by SEC enforcement actions, according to Auditing Integrity. It characterizes a company’s behavior four ways: very aggressive, aggressive, average and conservative.

The Audit Integrity analysis focuses on the 25 financial services companies that have received more than 90 percent of TARP funds to date. Of the 14 financial services companies that received a very-aggressive rating, 10 were among the recipients of the largest amounts of TARP money. They were American International Group, Bank of America, Citigroup, Fifth Third Bancorp, Goldman Sachs Group, JPMorgan Chase, Merrill Lynch, Morgan Stanley, PNC Financial Services Group, and Wells Fargo. The governance research firm also noted that General Motors and Ford Motor, which have been mentioned for possible TARP bailouts, also have low AGR ratings.

In general, Audit Integrity flagged metrics in the following accounting or corporate governance areas as contributing to the TARP recipients’ low ratings: The chairman is also CEO (74.1 percent); incentive compensation/total compensation ratio (70.4 percent); merger-and-acquisition performance (63 percent); divestitures (51.9 percent); and litigation/regulatory record (51.9 percent).

Audit Integrity also points out that a substantial portion of TARP recipients have low ratings for their financial condition, a category that reflects, among other measures, leverage, liquidity, profitability, and capital base. In fact, 96 percent of TARP recipients are rated either weak or average in those areas, based on the most recent regulatory filings.

Of TARP recipients accepting the highest dollar amounts of capital, the financial-condition ratings showed Wells Fargo, Merrill Lynch, and Regions Financial as weak, with Citigroup, JPMorgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, PNC Financial, and US Bancorp scored average.

“Allocation of TARP money to such financial institutions seems contradictory to the original intention of TARP, which was to provide capital to healthy financial institutions,” Audit Integrity says in its analysis. “While the TARP money may help to stem credit losses, it will not alter the fundamental risk and the potential for fraud in these Very Aggressive and Aggressive banks.”