Proceedings of the 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022)

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Validity of Fraud Detection Models on Fraudulent US-listed Chinese Companies

Authors
Wuyou Shu1, *, Tianxi He2, Xinghan Li3, Yuhao Gong4
1Steinhardt School of Culture, Education, and Human Development, New York University, New York City, NY, 10003, United States
2School of Social Sciences, University of California Irvine, Irvine, CA, 92697, United States
3School of Asia, Beijing Foreign Studies University, Beijing, 100081, China
4Solbridge International School of Business, Woosong University, Daejeon, 34613, Republic of Korea
*Corresponding author. Email: ws1605@nyu.edu
Corresponding Author
Wuyou Shu
Available Online 27 December 2022.
DOI
10.2991/978-94-6463-098-5_199How to use a DOI?
Keywords
Chinese Companies; Fraud Detection Models; Beneish M-Score; Dechow F-Score
Abstract

This paper examines the effectiveness of Beneish M-Score and Dechow F-Score models in detecting financial frauds of US-listed Chinese companies. In conclusion, based on the data we collected, the validity for M-Score on US-listed Chinese companies is 85.71%, way higher than what Aghghaleh measured for American companies of 73.17%. The calculation and analysis of these models reveals that (1) Beneish M-Score indicates high validity among Chinese companies, while (2) Dechow F-Score fails to identify financial fraud correctly in our selected pool of Chinese companies. This paper evaluates the potential ways of preventing frauds in the light of the samples we collected.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
27 December 2022
ISBN
78-94-6463-098-5
ISSN
2352-5428
DOI
10.2991/978-94-6463-098-5_199How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Wuyou Shu
AU  - Tianxi He
AU  - Xinghan Li
AU  - Yuhao Gong
PY  - 2022
DA  - 2022/12/27
TI  - Validity of Fraud Detection Models on Fraudulent US-listed Chinese Companies
BT  - Proceedings of the 2022 4th International Conference on Economic Management and Cultural Industry (ICEMCI 2022)
PB  - Atlantis Press
SP  - 1759
EP  - 1781
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-098-5_199
DO  - 10.2991/978-94-6463-098-5_199
ID  - Shu2022
ER  -