Forensic Finance

Patrick Verwijmeren

ERIM Inaugural Address Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

Abstract: __Abstract__ The financial world does not have the best reputation. One of the problems is the perceived lack of integrity of financial markets, which is fuelled by examples of financial misconduct. I argue that with financial data becoming more widely available and constantly improving, financial researchers could help in identifying suspicious behavior in financial markets. I will provide examples of potentially fraudulent behavior surrounding executive compensation and security issuance. Allegedly, companies have backdated executives’ stock options and as such have increased executives’ effective compensation, and there might be widespread insider trading before the announcements of privately placed securities. Systematic analyses of the available data could detect these examples of misconduct. Overall, forensic finance has the potential to detect suspicious behavior and as such could play an important role in understanding and improving the integrity of the financial world.

Keywords: Financial markets; executive compensation; stock options price; insider trading; financial research; forensic finance (search for similar items in EconPapers)
JEL-codes: G12 G14 G24 G28 G3 K14 (search for similar items in EconPapers)
Date: 2014-09-19
New Economics Papers: this item is included in nep-cfn, nep-hme and nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:ems:euriar:76906

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