IDEAS home Printed from https://ideas.repec.org/a/eee/ijoais/v26y2017icp32-45.html
   My bibliography  Save this article

Enhancement of fraud detection for narratives in annual reports

Author

Listed:
  • Chen, Yuh-Jen
  • Wu, Chun-Han
  • Chen, Yuh-Min
  • Li, Hsin-Ying
  • Chen, Huei-Kuen

Abstract

Annual reports present the activities of a listed company in terms of its operational performance, financial conditions, and social responsibilities. These reports are a valuable reference for numerous investors, creditors, and other accounting information end users. However, many annual reports exaggerate enterprise activities to raise investors' capital and support from financial institutions, thereby diminishing the usefulness of such reports. Effectively detecting fraud in the annual report of a company is thus a priority concern during an audit.

Suggested Citation

  • Chen, Yuh-Jen & Wu, Chun-Han & Chen, Yuh-Min & Li, Hsin-Ying & Chen, Huei-Kuen, 2017. "Enhancement of fraud detection for narratives in annual reports," International Journal of Accounting Information Systems, Elsevier, vol. 26(C), pages 32-45.
    • Handle: RePEc:eee:ijoais:v:26:y:2017:i:c:p:32-45
    DOI: 10.1016/j.accinf.2017.06.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1467089516300343
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.accinf.2017.06.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yekini, Liafisu Sina & Wisniewski, Tomasz Piotr & Millo, Yuval, 2016. "Market reaction to the positiveness of annual report narratives," The British Accounting Review, Elsevier, vol. 48(4), pages 415-430.
    2. Tomasz Piotr Wisniewski & Liafisu Sina Yekini, 2015. "Stock market returns and the content of annual report narratives," Accounting Forum, Taylor & Francis Journals, vol. 39(4), pages 281-294, December.
    3. Gaétan Breton & Richard Taffler, 2001. "Accounting information and analyst stock recommendation decisions: a content analysis approach," Accounting and Business Research, Taylor & Francis Journals, vol. 31(2), pages 91-101.
    4. Edward H. Bowman, 1984. "Content Analysis of Annual Reports for Corporate Strategy and Risk," Interfaces, INFORMS, vol. 14(1), pages 61-71, February.
    5. Stern, Helman & Chassidim, Yoash & Zofi, Moshe, 2006. "Multiagent visual area coverage using a new genetic algorithm selection scheme," European Journal of Operational Research, Elsevier, vol. 175(3), pages 1890-1907, December.
    6. Lina Zhou & Judee K. Burgoon & Jay F. Nunamaker & Doug Twitchell, 2004. "Automating Linguistics-Based Cues for Detecting Deception in Text-Based Asynchronous Computer-Mediated Communications," Group Decision and Negotiation, Springer, vol. 13(1), pages 81-106, January.
    7. Vivien Beattie & Bill McInnes & Stella Fearnley, 2004. "A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes," Accounting Forum, Taylor & Francis Journals, vol. 28(3), pages 205-236, September.
    8. Joseph F. Brazel & Keith L. Jones & Mark F. Zimbelman, 2009. "Using Nonfinancial Measures to Assess Fraud Risk," Journal of Accounting Research, Wiley Blackwell, vol. 47(5), pages 1135-1166, December.
    9. Eric R. Hake, 2005. "Financial Illusion: Accounting for Profits in an Enron World," Journal of Economic Issues, Taylor & Francis Journals, vol. 39(3), pages 595-611, September.
    10. Patricia M. Dechow & Weili Ge & Chad R. Larson & Richard G. Sloan, 2011. "Predicting Material Accounting Misstatements," Contemporary Accounting Research, John Wiley & Sons, vol. 28(1), pages 17-82, March.
    11. Debreceny, Roger S. & Gray, Glen L., 2010. "Data mining journal entries for fraud detection: An exploratory study," International Journal of Accounting Information Systems, Elsevier, vol. 11(3), pages 157-181.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Monica Ramos Montesdeoca & Agustín J. Sánchez Medina & Felix Blázquez Santana, 2019. "Research Topics in Accounting Fraud in the 21st Century: A State of the Art," Sustainability, MDPI, vol. 11(6), pages 1-31, March.
    2. Yubin Qian & Ya Sun, 2021. "The Correlation Between Annual Reports’ Narratives and Business Performance: A Retrospective Analysis," SAGE Open, , vol. 11(3), pages 21582440211, July.
    3. Fábio Albuquerque & Paula Gomes Dos Santos, 2023. "Recent Trends in Accounting and Information System Research: A Literature Review Using Textual Analysis Tools," FinTech, MDPI, vol. 2(2), pages 1-27, April.
    4. Ahmad Hammami & Mohammad Hendijani Zadeh, 2022. "Predicting earnings management through machine learning ensemble classifiers," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 41(8), pages 1639-1660, December.
    5. Papík, Mário & Papíková, Lenka, 2022. "Detecting accounting fraud in companies reporting under US GAAP through data mining," International Journal of Accounting Information Systems, Elsevier, vol. 45(C).
    6. Berkin, Anil & Aerts, Walter & Van Caneghem, Tom, 2023. "Feasibility analysis of machine learning for performance-related attributional statements," International Journal of Accounting Information Systems, Elsevier, vol. 48(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ingrid E. Fisher & Margaret R. Garnsey & Mark E. Hughes, 2016. "Natural Language Processing in Accounting, Auditing and Finance: A Synthesis of the Literature with a Roadmap for Future Research," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 23(3), pages 157-214, July.
    2. Wei, Lang & Zhang, Yiling, 2023. "Nonfinancial indicators in identifying stock price crash risk," Finance Research Letters, Elsevier, vol. 52(C).
    3. Dan Amiram & Zahn Bozanic & James D. Cox & Quentin Dupont & Jonathan M. Karpoff & Richard Sloan, 2018. "Financial reporting fraud and other forms of misconduct: a multidisciplinary review of the literature," Review of Accounting Studies, Springer, vol. 23(2), pages 732-783, June.
    4. Raghunandan, Aneesh, 2021. "Financial misconduct and employee mistreatment: evidence from wage theft," LSE Research Online Documents on Economics 109863, London School of Economics and Political Science, LSE Library.
    5. Abdullah Albizri & Deniz Appelbaum & Nicholas Rizzotto, 2019. "Evaluation of financial statements fraud detection research: a multi-disciplinary analysis," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 16(4), pages 206-241, December.
    6. Iselin, Michael & Johnson, Bret & Ott, Jacob & Raleigh, Jacob, 2022. "Protecting wall street or main street: SEC monitoring and enforcement of retail-owned firms," LSE Research Online Documents on Economics 117743, London School of Economics and Political Science, LSE Library.
    7. Feng Li, 2012. "Discussion of Analyzing Speech to Detect Financial Misreporting," Journal of Accounting Research, Wiley Blackwell, vol. 50(2), pages 393-400, May.
    8. Abraham, Santhosh & Cox, Paul, 2007. "Analysing the determinants of narrative risk information in UK FTSE 100 annual reports," The British Accounting Review, Elsevier, vol. 39(3), pages 227-248.
    9. Tahir, Muhammad & Ibrahim, Salma & Nurullah, Mohamed, 2019. "Getting compensation right - The choice of performance measures in CEO bonus contracts and earnings management," The British Accounting Review, Elsevier, vol. 51(2), pages 148-169.
    10. Abhayawansa, Subhash & Guthrie, James, 2016. "Does intellectual capital disclosure in analysts' reports vary by firm characteristics?," Advances in accounting, Elsevier, vol. 35(C), pages 26-38.
    11. Jessen L. Hobson & William J. Mayew & Mohan Venkatachalam, 2012. "Analyzing Speech to Detect Financial Misreporting," Journal of Accounting Research, Wiley Blackwell, vol. 50(2), pages 349-392, May.
    12. Adrian Gepp & Kuldeep Kumar & Sukanto Bhattacharya, 2021. "Lifting the numbers game: identifying key input variables and a best‐performing model to detect financial statement fraud," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(3), pages 4601-4638, September.
    13. Bassyouny, Hesham & Abdelfattah, Tarek & Tao, Lei, 2022. "Narrative disclosure tone: A review and areas for future research," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 49(C).
    14. Bassyouny, Hesham & Abdelfattah, Tarek & Tao, Lei, 2020. "Beyond narrative disclosure tone: The upper echelons theory perspective," International Review of Financial Analysis, Elsevier, vol. 70(C).
    15. Mingzi Song & Naoto Oshiro & Akinobu Shuto, 2016. "Predicting Accounting Fraud: Evidence from Japan," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 6, pages 17-63, December.
    16. Omaima Hassan & Claire Marston, 2010. "Disclosure measurement in the empirical accounting literature - a review article," Accountancy Discussion Papers 1004, Accountancy Research Group, Heriot Watt University.
    17. Joseph F. Brazel & Lorenzo Lucianetti & Tammie J. Schaefer, 2021. "Reporting Concerns About Earnings Quality: An Examination of Corporate Managers," Journal of Business Ethics, Springer, vol. 171(3), pages 435-457, July.
    18. Niamh Brennan & Encarna Guillamon-Saorin & Aileen Pierce, 2009. "Impression management : developing and illustrating a scheme of analysis for narrative disclosures – a methodological note," Open Access publications 10197/2905, Research Repository, University College Dublin.
    19. Ahmed Hassanein & Alaa Zalata & Khaled Hussainey, 2019. "Do forward-looking narratives affect investors’ valuation of UK FTSE all-shares firms?," Review of Quantitative Finance and Accounting, Springer, vol. 52(2), pages 493-519, February.
    20. Aneesh Raghunandan, 2021. "Financial misconduct and employee mistreatment: Evidence from wage theft," Review of Accounting Studies, Springer, vol. 26(3), pages 867-905, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ijoais:v:26:y:2017:i:c:p:32-45. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/international-journal-of-accounting-information-systems/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.