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

Wuyou Shu; Tianxi He; Xinghan Li; Yuhao Gong

doi:10.2991/978-94-6463-098-5_199

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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_199 How 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.
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: 10.2991/978-94-6463-098-5_199
ISSN: 2352-5428
DOI: 10.2991/978-94-6463-098-5_199 How to use a DOI?
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

ris enw bib

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  -

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