A computational model for financial reporting fraud detection

Fletcher H. Glancy, Surya B. Yadav

Research output: Contribution to journalArticlepeer-review

79 Scopus citations

Abstract

A computational fraud detection model (CFDM) was proposed for detecting fraud in financial reporting. CFDM uses a quantitative approach on textual data. It incorporates techniques that use essentially all of information contained in the textual data for fraud detection. Extant work provides a foundation for detecting deception in high and low synchronicity computer-mediated communication (CMC). CFDM provides an analytical method that has the potential for automation. It was tested on the Management's Discussion and Analysis from 10-K filings and was able to distinguish fraudulent filings from non-fraudulent ones. CFDM can serve as a screening tool where deception is suspected.

Original languageEnglish
Pages (from-to)595-601
Number of pages7
JournalDecision Support Systems
Volume50
Issue number3
DOIs
StatePublished - Feb 2011

Keywords

  • Financial reporting
  • Fraud
  • Quantitative model
  • Text mining

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