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Research on a financial fraud identification model by fusing a convolutional neural network

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  • Haiyan Lu
  • Shuhe Zhu
  • Yajing Zhang
  • Ruyi Lv

Abstract

To address the challenges of low accuracy and poor real-time performance in existing financial fraud identification methods for listed companies, this paper proposes a hybrid identification model (CNN-SVM) that fuses a convolutional neural network with a support vector machine. Utilizing a comprehensive dataset of 7,429 samples from non-financial A-share listed companies penalized for fraud between 2007 and 2022, the study employs random oversampling to rebalance the minority class, resulting in a robust training set of 13,540 samples. The model leverages a CNN architecture to automatically extract high-level features from 87 indicators spanning corporate governance, financial oversight, and operational metrics, which are then classified using a linear-kernel SVM. Experimental results demonstrate that the CNN-SVM model achieves a qualitative leap in performance, yielding an AUC of 0.97, a recall of 0.99, and an F1-score of 0.97, significantly outperforming traditional logistic regression and random forest benchmarks. These findings suggest that the proposed framework effectively balances training efficiency with high precision, providing a superior tool for real-time financial risk control.

Suggested Citation

  • Haiyan Lu & Shuhe Zhu & Yajing Zhang & Ruyi Lv, 2026. "Research on a financial fraud identification model by fusing a convolutional neural network," PLOS ONE, Public Library of Science, vol. 21(5), pages 1-29, May.
  • Handle: RePEc:plo:pone00:0348569
    DOI: 10.1371/journal.pone.0348569
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    References listed on IDEAS

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    1. Thomas A. Lee & Robert W. Ingram & Thomas P. Howard, 1999. "The Difference between Earnings and Operating Cash Flow as an Indicator of Financial Reporting Fraud," Contemporary Accounting Research, John Wiley & Sons, vol. 16(4), pages 749-786, December.
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