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Detecting accounting fraud using quantitative techniques

Nirali Singh and Oriol Amat ()
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Oriol Amat: https://www.upf.edu/web/econ/faculty/-/asset_publisher/6aWmmXf28uXT/persona/id/3418815

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: This study deals with the detection of accounting fraud from an economic perspective. It is a topic of great relevance since the accounting information of a company is crucial in the decision-making process of different stakeholders. However, very often accounting frauds occurs and have very negative consequences. This motivates the interest in detecting fraud as soon as possible. In this article, we propose the use of a set of accounting fraud detection techniques and they are applied to the case of Ricoh India, a company that had an accounting fraud that caused a great scandal in 2015. The main contribution of the study is the empirical demonstration that it is possible to detect accounting fraud several years before the deception is disclosed to all interested parties. Early detection of the fraud can be of great use to managers, analysts, investors, and supervisors in their desire to avoid the negative consequences of accounting fraud.

Keywords: Accounts manipulation; accounting fraud; balance Sheet; Income statement; ratios; Z score (search for similar items in EconPapers)
JEL-codes: M41 M42 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-acc
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