A Corpus Driven Computational Intelligence Framework for Deception Detection in Financial Text

Financial fraud rampages onwards seemingly uncontained. The annual cost of fraud in the UK is estimated to be as high as £193bn a year [1] . From a data science perspective and hitherto less explored this thesis demonstrates how the use of linguistic features to drive data mining algorithms can aid in unravelling fraud. To this end, the spotlight is turned on Financial Statement Fraud (FSF), known to be the costliest type of fraud [2]. A new corpus of 6.3 million words is composed of102 annual reports/10-K (narrative sections) from firms formally indicted for FSF juxtaposed with 306 non-fraud firms of similar size and industrial grouping. Differently from other similar studies, this thesis uniquely takes a wide angled view and extracts a range of features of different categories from the corpus. These linguistic correlates of deception are uncovered using a variety of techniques and tools. Corpus linguistics methodology is applied to extract keywords and to examine linguistic structure. N-grams are extracted to draw out collocations. Readability measurement in financial text is advanced through the extraction of new indices that probe the text at a deeper level. Cognitive and perceptual processes are also picked out. Tone, intention and liquidity are gauged using customised word lists. Linguistic ratios are derived from grammatical constructs and word categories. An attempt is also made to determine ‘what’ was said as opposed to ‘how’. Further a new module is developed to condense synonyms into concepts. Lastly frequency counts from keywords unearthed from a previous content analysis study on financial narrative are also used. These features are then used to drive machine learning based classification and clustering algorithms to determine if they aid in discriminating a fraud from a non-fraud firm. The results derived from the battery of models built typically exceed classification accuracy of 70%. The above process is amalgamated into a framework. The process outlined, driven by empirical data demonstrates in a practical way how linguistic analysis could aid in fraud detection and also constitutes a unique contribution made to deception detection studies

New Weighting Schemes for Document Ranking and Ranked Query Suggestion

Term weighting is a process of scoring and ranking a term’s relevance to a user’s information need or the importance of a term to a document. This thesis aims to investigate novel term weighting methods with applications in document representation for text classification, web document ranking, and ranked query suggestion. Firstly, this research proposes a new feature for document representation under the vector space model (VSM) framework, i.e., class specific document frequency (CSDF), which leads to a new term weighting scheme based on term frequency (TF) and the newly proposed feature. The experimental results show that the proposed methods, CSDF and TF-CSDF, improve the performance of document classification in comparison with other widely used VSM document representations. Secondly, a new ranking method called GCrank is proposed for re-ranking web documents returned from search engines using document classification scores. The experimental results show that the GCrank method can improve the performance of web returned document ranking in terms of several commonly used evaluation criteria. Finally, this research investigates several state-of-the-art ranked retrieval methods, adapts and combines them as well, leading to a new method called Tfjac for ranked query suggestion, which is based on the combination between TF-IDF and Jaccard coefficient methods. The experimental results show that Tfjac is the best method for query suggestion among the methods evaluated. It outperforms the most popularly used TF-IDF method in terms of increasing the number of highly relevant query suggestions

Document Representation in Natural Language Text Retrieval

In information retrieval, the content of a document may be represented as a collection of terms: words, stems, phrases, or other units derived or inferred from the text of the document. These terms are usually weighted to indicate their importance within the document which can then be viewed as a vector in a N-dimensional space. In this paper we demonstrate that a proper term weighting is at least as important as their selection, and that dif-ferent types of terms (e.g., words, phrases, names), and terms derived by different means (e.g., statistical, linguistic) must be treated differently for a maximum benefit in rel~ieval. We report some observations made during and after the second Text REtrieval Conference (TREC-2). 1 1