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Information distortion affects the perception of quality, which, in turn, influences investment decisions and determines the pledge results of fundraising. This study combines signalling theory with persuasion theory to empirically study the effects of linguistic information distortion from fraudulent cues on a crowdfunding campaign's fundraising outcomes using text analytics, with implications for entrepreneurs, platforms and investors.

This study empirically analyzes 328,974 crowdfunding projects from the Kickstarter platform. Information distortion is detected using four indicators, based on text mining analytics. An econometric model is built to estimate the impact of information distortion, while the predictive power of the information distortion is detected through machine learning.

The results inform that distortion in the blurb, detailed description and reward statement dampen a campaign's success, but embellishing the entrepreneur's biography enhances the success of financing. Furthermore, information distortion exhibits a significant inverted U-shaped influence. The effect of the interaction terms suggests that campaigns with high pledge goals are more sensitive to information distortion, and that native-speaking entrepreneurs are adept at applying linguistic skills to promote the campaign.

This study provides a linguistic method to detect the influence of information distortion on crowdfunding campaigns. Further, the study offers some practical suggestions for entrepreneurs on how to generate attractive narratives, and contributes to the investor's decision-making and informs the platform's promotion strategy.

This paper reviews an array of psycholinguistic techniques that auditors can deploy to explore written and oral language for signs of deception. The review is drawn upon to propose some elements of a forward research agenda.

Relevant literature across several disciplines is identified through keyword searches of major bibliographic databases.

The techniques highlighted have considerable potential for use by auditors to identify audit contexts which merit closer audit investigation. However, the techniques need further contextual empirical investigation in audit contexts. Seven specific propositions are presented for empirical testing.

This paper assembles literature on deceptive communication from a wide range of disciplines and relates it to the audit context. Auditors’ attention is directed to potential linguistic signals of fraud risk, and opportunities for future research are suggested. The paper is consciousness-raising, has pedagogic purpose and suggests critical elements for a future research agenda.

This study aims to attempt a gender-based ex post examination of behavioral red flags of fraud exhibited by fraud perpetrators.

Qualitative data collected from semi-structured interviews were triangulated, quantified and subjected to statistical analysis to calculate the relative risk of exhibition of a behavioral red flag of fraud by a male/female fraud perpetrator.

This study reports the percentage of fraud cases in which male and female fraud perpetrators display particular behavioral red flags. The study also enlists the behavioral red flags likely to be more frequently exhibited by female fraud perpetrators relative to male fraud perpetrators and vice-versa.

Use of the results of this study in anti-fraud training is likely to make organizational fraud more susceptible to observation.

This study is unique because it is one of the very few studies that examine employee behavior as a potential fraud signal, establish gender distinction in behavioral red flags of fraud, and assess this phenomenon in a country other than a Western country.

Financial reporting decisions are influenced by environmental and individual factors. One environmental factor is the example set by management. Research has shown that the tone at the top is related to financial reporting decisions. However, this does not take into consideration that ethical cues from an employee's supervisor might also be relevant. On an individual basis, people who make unethical financial reporting decisions do not appear to be bad or evil people. So, why do these seemingly “good” people make these decisions? The theory of self-concept maintenance (Mazar et al., 2008) posits that individuals balance the desire to gain by behaving unethically with the desire to maintain a positive self-image by behaving ethically. How one balances these is based on one's ability to rationalize an action as honest, with decisions seen as having an ethical component being more difficult to rationalize. Findings indicate that having one person in a leadership position demonstrate a commitment to ethical behavior is related to more ethical financial reporting decisions, whether that person is at the top or closer to the middle. Additionally, a strong tone at the top is related to perceiving a situation is an ethical dilemma while a strong tune in the middle is not. Last, the authors find that a stronger perception that a situation is an ethical dilemma is associated with more ethical financial reporting decisions when the tune in the middle is controlled for, but not when the tone at the top is controlled for.

Researchers are continually trying to find reliable fraud indicators (e.g., Beasley, 1996) and some are working on building fraud prediction models (e.g., Spathis, 2002) to aid auditors in fraud detection. With this same goal of predicting fraud in mind, the purpose of this study is to explore the potential of qualitative fraud risk indicators. Content analysis is used in analyzing the Management's Discussion and Analysis (MDA) section of the annual report to identify potential indicators of deception to increase the likelihood of fraud detection in a timelier manner than current quantitative models.

By examining asynchronous communication contained in annual reports for companies required by the SEC to restate their financial statements, patterns of key linguistic characteristics were identified and compared to those used by companies not required to restate. Findings evidence significant differences on several dimensions. Using language cues for detection of deception has the advantage over quantitative methods of providing a more timely method of determining deception. Quantitative models often cannot detect deception until the effects are validated by financial impairment.

Implications of the findings suggest that qualitative methods of deception detection may provide an earlier, and thus more useful, method of the detection of fraud. The results of this study should provide stakeholders with a set of indicators to aid in identifying misstated information. This approach is also one that can be generalized to other written documents used to predict fraudulent communication.

This study aims to observe people’s decisions to commit fraud. This study is important in the current time because it provides insights into the development of fraudulent intentions within individuals.

The information used in this study is derived from semi-structured interviews, conducted with 16 high-ranking officials who are employed in Indonesian local government positions.

The study does not have strong evidence to support prior studies assuming that situational factors or social enablers have direct effects on fraud intentions. As suggested, individual factors which are related to moral reasoning (moral judgment and rationalisation) emerge as a consequence of social enablers. The significant role of that moral reasoning is to rationalise any fraud attempt as permissible conduct. As such, when an individual is capable of legitimising his/her fraud attempt into appropriate self-judgement, s/he is more likely to engage in fraudulent behaviours.

This study offers practical prescriptions in guiding the management to develop strategies to curb fraudulent behaviours. The study suggests that moral cognitive reasoning is found to be a parameter of whether fraud is an acceptable option or not. So, an understanding of observers’ moral reasoning is helpful in predicting the likelihood of fraud within an organisation or in detecting it.

This study provides a different perspective on the psychological pathway to fraud. It becomes a complement work for the fraud triangle to explain fraudulent behaviours. Specifically, it provides crucial insights into the underlying motivations that lead individuals to accept invitations to engage in fraudulent activities.

The purpose of this study is to reconstruct the use of disposition variables as determinants of fraudulent behaviours. It is hoped, it stimulates our critical understanding of psychological aetiology on individual’s intention to perpetrate partial fraud or to co-offend.

This study was developed as a reflection of empirical work conducted in Indonesia public sectors.

By suggesting the important process of individual’s cognitive reasoning, this study identifies that there is an overlooked process made by prior studies in terms of personality traits as a strong predictive power for individual’s intention to commit fraudulent behaviours or white-collar crimes. This study argues that they should not be independently predictive of fraud behaviours. This study acknowledges that in the prediction of social behaviours, whether fraudulent behaviours or not, there are no absolute answers to or analyses of it. However, it is instructive to consider social cognitive theory in elucidating the psychological pathways associated with fraudulent behaviours. This is because it can bridge an appropriate lens in positioning personalised behaviours as a predictor of perpetrating fraudulent behaviours. Then, this study does not have any serious concerns about how many antecedents influence behaviours of intention to perform wrongdoings. However, the functioning of individual cognitive reasoning should not be ignored. Both theoretical and managerial implications from this study are discussed to suggest alternative theories on causes of fraudulent behaviours.

This study uses social cognitive theory as a basis of analysis. Through a simple analysis, a different perspective of treating the antecedents of fraud has been proposed, so that it can be used to develop more effective intervention that can deter fraudulent behaviours within an organisation.

This study theoretically explores psychological mechanisms or pathways related to the functioning of individual’s reasoning. Then, this study proposes the critiques, in which it is intended to stimulate another research on deepening and broadening a theory of fraud. In short, this study importantly also offers recommendations and opportunities for future research and organisations to develop effective prevention that can deter fraudulent behaviours.

This chapter examines whether professional auditors’ affect toward client management influences fraud likelihood judgments and whether accountability and experience with fraud risk judgments moderate this effect. This research also explores the process by which affect influences fraud judgments by examining affect’s influence on the evaluation of fraud evidence cues. Results indicate that more positive affect toward the client results in lower fraud likelihood judgments. Accountability is found to moderate this effect, but only for experienced auditors. These findings have implications for fraud brainstorming sessions where all staff levels provide input into fraud risk assessments and because client characteristics are especially salient during these assessments. Importantly, results also support the proposition that affect impacts inexperienced auditors’ fraud assessments through errant attribution of client likability to evidence cues that refer to management, rather than biasing all client-related evaluations. Together, these findings suggest that education and training can be improved to better differentiate relevant and irrelevant cues in fraud judgment.

The insurance industry both in the UK and abroad uses a variety of measures to counter fraud. This short paper, as well as examining these measures, will report on the apparent success the industry is having against fraudsters in the UK. In addition to this some of the more noteworthy cases will be reported upon in order to inform the reader of the differing types of frauds which may be encountered.

Fraudulent financial statements and the manipulation of stock prices can seriously affect investors' judgment of company performance, especially in stock markets in emerging economies. Apart from financial reports, which run the risk of being misreported, are there any other information sources that the public can trust when it comes to the truth about a company's performance? The purpose of this paper is to address this issue by assessing the correlation between online recruitment information and company performance and provide investors with a new framework to assist them in making decisions and to identify fraud.

The research extracted the recruitment information of normal and fraudulent companies separately from the internet by employing techniques of natural language processing, opinion mining and competitive intelligence. A statistical tool was then used to study whether there is a difference in the correlation between the recruitment information intensity (RII) and the annually averaged stock price (AASP) of normal and fraudulent firms.

The experiments showed that recruitment information intensity is significantly correlated to company's stock performance for normal firms, which indicates that the company's recruitment activities are consistent with their performance. But for fraudulent companies, the fact that the result is quite the opposite may imply that the RII discloses the truth when managers make misreports.

The findings suggest that the intensity of a company's recruitment information is a valuable element for investors in evaluating the firm, and it also can be used as a reliable tool to assist in identifying fraudulent companies.

This paper provided a novel way for the public to break information barriers to reach the truth of companies' performance and avoid misleading fraudulent finance statements. It is also a useful application of natural language processing techniques.