How Informative Are Fraud and Non-Fraud Firms\u27 Earnings?

This study evaluates how informative the earnings of fraud firms are compared to peer non-fraud firms by assessing informativeness in the context of persistence, analysts’ forecast errors, and stock returns. There are differences in how informative the earnings of fraud firms are to analysts’ forecasts and returns in the pre-fraud period, but not in the fraud period. In the post- fraud period, there is no difference in how informative fraud firms’ earnings are to analysts’ earnings forecasts. Furthermore, fraud firm’s earnings are not differentially associated with excess returns post-fraud. When earnings are decomposed into accruals and cash flows, fraud firms’ accruals are more persistent pre-fraud and less so post- fraud while cash flows are not differentially persistent conditional on fraud. The study presents insights that can help practitioners, auditors, regulators, and researchers identify fraud candidates

How local media coverage of voter fraud influences partisan perceptions in the United States

Extant findings show that voter fraud is extremely rare and difficult to prove in the United States. Voter’s knowledge about voter fraud allegations likely comes through the media, who tend to sensationalize the issue. In this study, we argue that the more voters are exposed to media coverage of voter fraud allegations, the more likely that they will perceive that voter fraud is a frequent problem. We merge the 2012 Survey of Performance of American Elections with state-level media coverage of voter fraud leading up to the 2012 election. Our results show that media coverage of voter fraud is associated with public beliefs about voter fraud. In states where fraud was more frequently featured in local media outlets, public concerns about voter fraud were heightened. In particular, we find that press attention to voter fraud has a larger influence on Republicans than Democrats and Independents. We further find that media coverage of voter fraud does not further polarize partisan perceptions of voter fraud. Rather, political interest moderates state media coverage on voter fraud beliefs only among Republicans. Lastly, our results provide no support that demographic changes, approval of election administration, or information concerning actual reported voting irregularities have any discernable effects on partisan perceptions

Search Rank Fraud De-Anonymization in Online Systems

We introduce the fraud de-anonymization problem, that goes beyond fraud detection, to unmask the human masterminds responsible for posting search rank fraud in online systems. We collect and study search rank fraud data from Upwork, and survey the capabilities and behaviors of 58 search rank fraudsters recruited from 6 crowdsourcing sites. We propose Dolos, a fraud de-anonymization system that leverages traits and behaviors extracted from these studies, to attribute detected fraud to crowdsourcing site fraudsters, thus to real identities and bank accounts. We introduce MCDense, a min-cut dense component detection algorithm to uncover groups of user accounts controlled by different fraudsters, and leverage stylometry and deep learning to attribute them to crowdsourcing site profiles. Dolos correctly identified the owners of 95% of fraudster-controlled communities, and uncovered fraudsters who promoted as many as 97.5% of fraud apps we collected from Google Play. When evaluated on 13,087 apps (820,760 reviews), which we monitored over more than 6 months, Dolos identified 1,056 apps with suspicious reviewer groups. We report orthogonal evidence of their fraud, including fraud duplicates and fraud re-posts.Comment: The 29Th ACM Conference on Hypertext and Social Media, July 201

Tax fraud by firms and optimal auditing

Abstract Tax fraud is an issue of increasing importance in China. One particularly signi…cant fraud involves excessive claims for the rebate of VAT on exported goods. This fraud has two interesting features. First, it requires the collusion of an intermediary to supply the false documentation that supports a rebate application. Second, the punishment schedule is convex -with capital punishment used in major fraud cases. These features ensure that the payo¤ function of a …rm engaging in fraud is strictly concave in the level of fraud. This gives a well-de…ned optimization without the need to appeal to risk aversion. We show that the existence of fraud does not a¤ect the real output decision of the …rm nor the tax policy of the government. Audit resources can be used to detect …rms engaged in fraud as well as the intermediaries who supply false documents. Under reasonable assumptions it is shown that resources should be focused on detecting …rms and not intermediaries. Finally, if the government must take action on fraud a convex punishment scheme is shown to be optimal

What Is Fraud and Who Is Responsible?

Research shows that fraudulent activity affecting the financial statements is more prevalent than ever despite the increased attention devoted to the prevention and detection of fraud by companies and professional accountants. Fraud is a critical issue for preparers and users of financial statements, as well as auditors. Each group’s association and involvement with the financial statements is from a slightly different perspective. Even though all individuals in the financial reporting process share the responsibility for the integrity of the financial statements, different perspectives of fraud can and do affect each group’s interpretation of fraudulent activity and responsibility for the prevention and detection of fraud. Accordingly, two questions must be asked: What constitutes fraud, and who is responsible for the detection of fraud? This paper examines the similarities and differences in the definition of fraud, as documented by ten professional organizations, as well as who is responsible for fraud detection

An analysis of Voter Fraud in The United States

As federal and state officials consider future reform efforts, as well as the merits of existing reforms, there is an acute need for better information and analysis about election and voter fraud issues. While the issue of fraud is raised continually in discussions of election reform, to date there have been few major studies of voter fraud in the United States. Too often in this area, hearsay and anecdotal information are put forth as fact in important public policy debates. Many key questions about fraud remain unanswered, including: How often does voter fraud occur? How serious a problem is fraud compared to other problems with the election process, such as those that occurred in Florida in the 2000 election or in Ohio in 2004? What kinds of voting methods are most vulnerable to corruption? What administrative, technological and legal steps can be taken to reduce the chances of voter fraud while also expanding opportunities to register and vote

The Politics of Voter Fraud

The purpose of this report is to disentangle the myth from the reality and to separate the politics of voter fraud from legitimate administrative concerns about the integrity of the electoral process. To make the argument, we present a usable definition of voter fraud, discuss the problem of evidence, and explain how and why the dynamics of electoral competition drive the use of baseless fraud claims in American politics. We present several contemporary examples to illustrate how poor election administration and voter mistakes are misleadingly labeled "fraud." Recent allegations against voter registration campaigns highlight the need for an analysis sensitive to the partisanship and race and class issues just beneath the surface of most voter fraud claims. The last section of the report makes policy recommendations for improving public understanding and removing the canard of voter fraud from the election reform debate. The appendix discusses what to look for in evaluating voter fraud allegations

The Truth About Voter Fraud

Allegations of election-related fraud make for enticing press. Many Americans remember vivid stories of voting improprieties in Chicagoland, or the suspiciously sudden appearance of LBJ's alphabetized ballot box in Texas, or Governor Earl Long's quip: "When I die, I want to be buried in Louisiana, so I can stay active in politics." Voter fraud, in particular, has the feel of a bank heist caper: roundly condemned but technically fascinating, and sufficiently lurid to grab and hold headlines. Perhaps because these stories are dramatic, voter fraud makes a popular scapegoat. In the aftermath of a close election, losing candidates are often quick to blame voter fraud for the results. Legislators cite voter fraud as justification for various new restrictions on the exercise of the franchise. And pundits trot out the same few anecdotes time and again as proof that a wave of fraud is imminent.Allegations of widespread voter fraud, however, often prove greatly exaggerated. It is easy to grab headlines with a lurid claim ("Tens of thousands may be voting illegally!"); the follow-up -- when any exists -- is not usually deemed newsworthy. Yet on closer examination, many of the claims of voter fraud amount to a great deal of smoke without much fire. The allegations simply do not pan out

Lessons from Health Care Fraud Cases: Implications for Management of Health Care Entities

Fraud has been a major issue all throughout the health care industry. There have been many cases around the world in relation to health care fraud. There are several laws now that do try to reduce the amount of healthcare fraud, but more changes could and should be made to reduce it even more. Four different cases that have occurred within the health care industry have be analyzed in this project. It looks at the positives and negatives of each company’s internal control structure and provides suggestions for how to improve these internal controls to prevent fraud from reoccurring in the health care industry. It also gives examples of other requirements that can be put in place in order to reduce the amount of fraud that occurs. Fraud is very common within the health care industry due to weaknesses within the companies’ internal control systems and many improvements should be made in order to prevent fraud from continuing to occur in the future