Artificial Intelligence and Fraud Detection

Abstract

Fraud exists in all walks of life and detecting and preventing fraud represents an important research question relevant to many stakeholders in society. With the rise of big data and artificial intelligence, new opportunities have arisen in using advanced machine learning models to detect fraud. This chapter provides a comprehensive overview of the challenges in detecting fraud using machine learning. We use a framework (data, method, and evaluation criterion) to review some of the practical considerations that may affect the implementation of ma-chine-learning models to predict fraud. Then, we review select papers in the academic literature across different disciplines that can help address some of the fraud detection challenges. Finally, we suggest promising future directions for this line of research. As accounting fraud constitutes an important class of fraud, we will discuss all of these issues within the context of accounting fraud detection.

Keywords: Artificial Intelligence, Faraud detection