This paper provides the theoretical review of the fraud risk characteristics, systematization of the existing fraud knowledge and the causes of fraud occurrence. Moreover, it determines the roles and the responsibilities of managers and auditors in the fraud risk assessments. In addition, risk factors relating to the misstatements arising from fraudulent financial reporting have been examined. ...

In this paper we consider the application of a naïve Bayes model for the evaluation of fraud risk connected with government agencies. This model applies probabilistic classifiers to support a generic risk assessment model, allowing for more efficient and effective use of resources for fraud detection in government transactions, and assisting audit agencies in transitioning from reactive to proa...

This paper analyzes a firm’s propensity to commit securities fraud and the real consequences of fraud. The theory shows that fraud has real economic cost, as investment distortions can arise from fraud-induced market misvaluation and management’s ability to influence the firm’s litigation risk through investment. The cost of inefficiency is borne by not only shareholders of fraudulent firms but...

We propose two models to identify fraud, waste and abuse in Medicare. These models are used to flag health care providers. The motivation for these models is based on observed cases of fraud. The paper details the use of clustering algorithms, regression analysis, and various descriptive statistics that are components of these models. Some of the challenges in the struggle to reduce fraud in Me...

researchers and practitioners doing work in these three related areas. Risk management, fraud detection, and intrusion detection all involve monitoring the behavior of populations of users (or their accounts) to estimate, plan for, avoid, or detect risk. In his paper, Til Schuermann (Oliver, Wyman, and Company) categorizes risk into market risk, credit risk, and operating risk (or fraud). Simil...

The integration of supply chains offers many benefits; yet, it may also render organisations more vulnerable to electronic fraud (e-fraud). E-fraud can drain on organisations’ financial resources, and can have a significant adverse effect on the ability to achieve their strategic objectives. Therefore, efraud control should be part of corporate board-level due diligence, and should be integrate...

This article develops an alternative form of Dempster’s rule of combination for binary variables. This alternative form does not only provide a closed form formulae for efficient computation but also enables researchers to develop closed form analytical formulae for assessing risks such as information security risk, fraud risk, audit risk, independence risk, etc., involved in assurance services...

A fr.ludsler can be an impersonator or a swindler. An impersonator is an illegitimate user who steals resources from the victims by "laking over" their accounts. A swindler is a Icgilimllle user who intentionally harms the system or olber users by deception. Previous rescart:h efforts in fraud detection concenrrnle on identifYing frauds caused by impersonators. Detecting fmuds conducted by swin...

The recent Stapel fraud case came as a shattering blow to the scientific community of psychologists and damaged both their image in the media and their collective self-esteem. The field responded with suggestions of how fraud could be prevented. However, the Stapel fraud is only one among many cases. Before basing recommendations on one case, it would be informative to study other cases to asse...