Download this Paper Open PDF in Browser

Contemporaneous Risk Factors and the Prediction of Financial Statement Fraud

42 Pages Posted: 19 Oct 2006 Last revised: 21 Aug 2008

Christopher J. Skousen

Utah State University - School of Accountancy

Charlotte J. Wright

Oklahoma State University - Stillwater

Date Written: August 24, 2006

Abstract

This study identifies the contemporaneous risk factors empirically related to financial statement fraud. Extant research identifies a number of individual factors related to fraud in various settings. In this study we examine an array of potential fraud risk factors in order to identify a comprehensive set of coexistent factors that are consistently linked to the incidence of financial statement fraud. Further, using the identified fraud risk factors, we construct a robust fraud prediction model. The analysis yields a number of significant factors related to pressure and opportunity. Using the significant fraud risk factors we then construct a fraud prediction model. The model correctly classifies fraud and no-fraud firms approximately 69.77 percent of the time, a substantial improvement over other fraud prediction models.

Keywords: Fraud prediction, fraud detection, risk factors, SAS No. 99

JEL Classification: M41, M49, M43, G34

Suggested Citation

Skousen, Christopher J. and Wright, Charlotte J., Contemporaneous Risk Factors and the Prediction of Financial Statement Fraud (August 24, 2006). Available at SSRN: https://ssrn.com/abstract=938736 or http://dx.doi.org/10.2139/ssrn.938736

Christopher J. Skousen (Contact Author)

Utah State University - School of Accountancy ( email )

College of Business
Logan, UT 84322-3540
United States

Charlotte J. Wright

Oklahoma State University - Stillwater ( email )

Stillwater, OK 74078-0555
United States

Paper statistics

Downloads
2,491
Rank
3,916
Abstract Views
7,969