Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2023 International Conference on Management Research and Economic Development
Series Vol. 22 , 13 September 2023
Open
Access | Article
Identifying Financial Report Frauds
* Author to whom correspondence should be addressed.
Abstract
Misreporting numbers in a company’s financial statements is not negligible, as manipulations will not reflect a reliable disclosure. With financial manipulation becoming more and more regular, it is obvious that solving financial manipulation is an issue that needs to be addressed gently. It becomes a necessity to find techniques or mechanisms that can effectively identify the potential of financial report fraud, increase the credibility of the corporation and boost the confidence of investors. In this paper, we argue that the M-score and F-score as two reliable tools for predicting the possibilities of financial manipulations. In this essay, we will introduce the background and principles of these two mechanisms, then verify their reliability and effectiveness on sample Us-listed Chinese companies, which include those associated with financial report frauds in the past. In addition, we will lay out our discovery and full verifying procedure to help readers have a better understanding of our research and perspectives.
Keywords
financial manipulations, US-listed Chinese companies, financial report frauds
References
1. Kniepmann, Clay M. “Fraud Triangle.” Corporate Finance Institute, 29 Nov. 2022, https://corporatefinanceinstitute.com/resources/accounting/fraud-triangle/.
2. Turner, Jerry L., et al. An Analysis of the Fraud Triangle. Jan. 2003, https://www.researchgate.net/profile/Theodore-Mock/publication/237777981_An_Analysis_of_the_Fraud_Triangle/links/00b4952769aa39a5fe000000/An-Analysis-of-the-Fraud-Triangle.pdf.
3. Beneish, Messod D., et al. “Fraud Detection and Expected Returns.” SSRN, 5 Feb. 2012, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1998387.
4. Dechow, Patricia, et al. “Predicting Material Accounting Misstatements.” SSRN, 30 June 2007, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=997483.
5. Keune, M. , & Johnstone, K. M. . SSRN-Inferences from the Revelation of Previously Uncorrected Accounting Misstatements by Marsha Keune, Karla Johnstone.
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).
- Volume Title
- Proceedings of the 2023 International Conference on Management Research and Economic Development
- ISBN (Print)
- 978-1-915371-87-4
- ISBN (Online)
- 978-1-915371-88-1
- Published Date
- 13 September 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/22/20230281
- Copyright
- 13 September 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited