Amsterdam Business School investigates use of AI to detect accounting fraud

Is it possible to identify accounting fraud from the published financial statements of quoted companies? Indranil Bhattacharya, a PhD candidate at the Amsterdam Business School (ABS) thinks it is. He uses a machine-learning model to assess whether managers wilfully try to mislead their shareholders. Bhattacharya is being supervised by Edo Roos Lindgreen, and assisted by fellow researcher Ana Micovic. His research draws on 10-K reports. These are documents that publicly traded US companies are required to file every year. Unlike the traditional way of detecting fraud, which basically relies on quantitative research, the ABS researcher is applying a machine-learning model in order to get at the deeper meaning of texts through contextual information. Huge financial interests.