Intelligent Fraud Detection in Financial Statements Using Machine Learning and Data Mining: A Systematic Literature Review
Fraudulent financial statements (FFS) are the results of manipulating financial elements by overvaluing incomes, assets, sales, and profits while underrating expenses, debts, or losses. To identify such fraudulent statements, traditional methods, including manual auditing and inspections, are costly...
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| Format: | Article |
| Language: | English |
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IEEE
2022-01-01
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| Series: | IEEE Access |
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| Online Access: | https://ieeexplore.ieee.org/document/9481913/ |
| _version_ | 1811218177805254656 |
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| author | Matin N. Ashtiani Bijan Raahemi |
| author_facet | Matin N. Ashtiani Bijan Raahemi |
| author_sort | Matin N. Ashtiani |
| collection | DOAJ |
| description | Fraudulent financial statements (FFS) are the results of manipulating financial elements by overvaluing incomes, assets, sales, and profits while underrating expenses, debts, or losses. To identify such fraudulent statements, traditional methods, including manual auditing and inspections, are costly, imprecise, and time-consuming. Intelligent methods can significantly help auditors in analyzing a large number of financial statements. In this study, we systematically review and synthesize the existing literature on intelligent fraud detection in corporate financial statements. In particular, the focus of this review is on exploring machine learning and data mining methods, as well as the various datasets that are studied for detecting financial fraud. We adopted the Kitchenham methodology as a well-defined protocol to extract, synthesize, and report the results. Accordingly, 47 articles were selected, synthesized, and analyzed. We present the key issues, gaps, and limitations in the area of fraud detection in financial statements and suggest areas for future research. Since supervised algorithms were employed more than unsupervised approaches like clustering, the future research should focus on unsupervised, semi-supervised, as well as bio-inspired and evolutionary heuristic methods for anomaly (fraud) detection. In terms of datasets, it is envisaged that future research making use of textual and audio data. While imposing new challenges, this unstructured data deserves further study as it can show interesting results for intelligent fraud detection. |
| first_indexed | 2024-04-12T07:05:13Z |
| format | Article |
| id | doaj.art-bb296aed0297456b8e2db030f7f0db63 |
| institution | Directory Open Access Journal |
| issn | 2169-3536 |
| language | English |
| last_indexed | 2024-04-12T07:05:13Z |
| publishDate | 2022-01-01 |
| publisher | IEEE |
| record_format | Article |
| series | IEEE Access |
| spelling | doaj.art-bb296aed0297456b8e2db030f7f0db632022-12-22T03:42:50ZengIEEEIEEE Access2169-35362022-01-0110725047252510.1109/ACCESS.2021.30967999481913Intelligent Fraud Detection in Financial Statements Using Machine Learning and Data Mining: A Systematic Literature ReviewMatin N. Ashtiani0https://orcid.org/0000-0002-1254-1141Bijan Raahemi1Knowledge Discovery and Data Mining Laboratory, Telfer School of Management, University of Ottawa, Ottawa, CanadaKnowledge Discovery and Data Mining Laboratory, Telfer School of Management, University of Ottawa, Ottawa, CanadaFraudulent financial statements (FFS) are the results of manipulating financial elements by overvaluing incomes, assets, sales, and profits while underrating expenses, debts, or losses. To identify such fraudulent statements, traditional methods, including manual auditing and inspections, are costly, imprecise, and time-consuming. Intelligent methods can significantly help auditors in analyzing a large number of financial statements. In this study, we systematically review and synthesize the existing literature on intelligent fraud detection in corporate financial statements. In particular, the focus of this review is on exploring machine learning and data mining methods, as well as the various datasets that are studied for detecting financial fraud. We adopted the Kitchenham methodology as a well-defined protocol to extract, synthesize, and report the results. Accordingly, 47 articles were selected, synthesized, and analyzed. We present the key issues, gaps, and limitations in the area of fraud detection in financial statements and suggest areas for future research. Since supervised algorithms were employed more than unsupervised approaches like clustering, the future research should focus on unsupervised, semi-supervised, as well as bio-inspired and evolutionary heuristic methods for anomaly (fraud) detection. In terms of datasets, it is envisaged that future research making use of textual and audio data. While imposing new challenges, this unstructured data deserves further study as it can show interesting results for intelligent fraud detection.https://ieeexplore.ieee.org/document/9481913/Fraud detectionfinancial statementmachine learningdata miningoutlier detectionsystematic literature review |
| spellingShingle | Matin N. Ashtiani Bijan Raahemi Intelligent Fraud Detection in Financial Statements Using Machine Learning and Data Mining: A Systematic Literature Review IEEE Access Fraud detection financial statement machine learning data mining outlier detection systematic literature review |
| title | Intelligent Fraud Detection in Financial Statements Using Machine Learning and Data Mining: A Systematic Literature Review |
| title_full | Intelligent Fraud Detection in Financial Statements Using Machine Learning and Data Mining: A Systematic Literature Review |
| title_fullStr | Intelligent Fraud Detection in Financial Statements Using Machine Learning and Data Mining: A Systematic Literature Review |
| title_full_unstemmed | Intelligent Fraud Detection in Financial Statements Using Machine Learning and Data Mining: A Systematic Literature Review |
| title_short | Intelligent Fraud Detection in Financial Statements Using Machine Learning and Data Mining: A Systematic Literature Review |
| title_sort | intelligent fraud detection in financial statements using machine learning and data mining a systematic literature review |
| topic | Fraud detection financial statement machine learning data mining outlier detection systematic literature review |
| url | https://ieeexplore.ieee.org/document/9481913/ |
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