Providing an Intelligent Model to Detect Fraud in Financial Statements

Subject Areas : Financial Accounting

Marzieh Poursaedi ¹ , Mahmood Hematfar ² , Seyed Enayatallah Alavi ³ , Roya Nasirzadeh ⁴

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Received: 2025-02-11 Accepted : 2025-04-25 Published : 2025-04-23

Keywords: Financial Statement Fraud Detection(FSFD) , Support Vector Machine , Artificial Neural Network, Particle Swarm Algorithm,

Abstract :

Some companies manipulate financial statements to users and commit fraud. Therefore, effort to detect fraud is essential. Meanwhile, data mining techniques have increasingly popular. This article aimed to use an advanced model to detect fraudulent financial statements and compare it with the other methods. Crowd optimization algorithms have been considered to solve many optimization problems, but so far, they have not been used in fraud detection research to determine the optimal value of SVM parameters and optimize ANN architecture. In this research, for the first time, the PSO algorithm was used as one of the best innovative optimization algorithms for these optimizations due to its memory and high convergence speed, as well as having solutions for exiting from local optimal points and cooperation and information sharing between particles to detect fraud. For this purpose, the financial statements of companies admitted to the stock exchange from 2017 to 2023 were reviewed. The findings showed that the SVM-PSO method, with 89.86%accuracy, compared to the ANN-PSO method, with 80.43%accuracy, and the LR method, with 69.57%accuracy, performs better in identifying suspected fraudulent financial statements. Combining the PSO algorithm with the SVM method has proven superior to other methods due to SVM's high ability to reduce false negatives and PSO's ability to fine-tune its parameters. This combination can be used for high-accuracy financial statement fraud detection.

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