A mid growing investor concern about the quality of China-based firms tapping the international capital markets, New York-based credit-rating agency Moody’s Investors Service Inc. recently began screening the companies it covers for signs of lurking governance and accounting risks, and found red flags at most of the firms.

Moody’s examined the firms for 20 red flags, including corporate governance weaknesses, opaque business models, fast-growth strategies, poor-quality earnings, and financial statement and audit quality. Almost all the firms Moody’s looked at triggered some of these concerns.

In terms of corporate governance, a recent Moody’s report notes, it’s difficult to determine the quality of governance at companies with limited operating histories. For family-controlled China-based firms, governance is even harder to assess, the report says. And the role of related businesses is tough to ascertain, as related-party transactions may be reported as being at arm’s length.

In terms of risky or opaque business models, the report says, Moody’s looks for signs of unusual characteristics such as excessively high margins, heavy reliance on a small number of customers, lack of information about those customers and a complicated business structure that makes it tough to verify revenue sources and asset values.

Companies that are growing quickly can also be a concern, as they often rely on more aggressive, risky strategies. The Moody’s report notes these risks can include overextended management, infrastructure, systems and financial resources.