Fraud Cases Research Articles

IoT Privacy Risks Revealed.

A user's devices such as their phone and computer are constantly bombarded by IoT devices and associated applications seeking connection to the user's devices. These IoT devices may or may not seek explicit user consent, thus leaving the users completely unaware the IoT device is collecting, using, and/or sharing their personal data or, only marginal informed, if the user consented to the connecting IoT device but did not read the associated privacy policies. Privacy policies are intended to inform users of what personally identifiable information (PII) data will be collected about them and the policies about how those PII data will be used and shared. This paper presents novel tools and the underlying algorithms employed by the Personal Privacy Assistant app (UTCID PPA) developed by the University of Texas at Austin Center for Identity to inform users of IoT devices seeking to connect to their devices and to notify those users of potential privacy risks posed by the respective IoT device. The assessment of these privacy risks must deal with the uncertainty associated with sharing the user's personal data. If privacy risk (R) equals the consequences (C) of an incident (i.e., personal data exposure) multiplied by the probability (P) of those consequences occurring (C × P), then efforts to control risks must seek to reduce the possible consequences of an incident as well as reduce the uncertainty of the incident and its consequences occurring. This research classifies risk according to two parameters: expected value of the incident's consequences and uncertainty (entropy) of those consequences. This research calculates the entropy of the privacy incident consequences by evaluating: (1) the data sharing policies governing the IoT resource and (2) the type of personal data exposed. The data sharing policies of an IoT resource are scored by the UTCID PrivacyCheck™, which uses machine learning to read and score the IoT resource privacy policies against metrics set forth by best practices and international regulations. The UTCID Identity Ecosystem uses empirical identity theft and fraud cases to assess the entropy of privacy incident consequences involving a specific type of personal data, such as name, address, Social Security number, fingerprint, and user location. By understanding the entropy of a privacy incident posed by a given IoT resource seeking to connect to a user's device, UTCID PPA offers actionable recommendations enhancing the user's control over IoT connections, interactions, their personal data, and, ultimately, user-centric privacy control.

Fraud Detection of the Electricity Consumption by combining Deep Learning and Statistical Methods

An important issue for the electricity distribution companies is the non-technical loss (NTL), also known as electricity fraud. This issue has a significant impact on the economies of all countries in the world. In this context, we studied the problem of the imbalance between the electrical energy invoiced and the electrical energy supplied within the Algerian economic sector. This article presents an approach to detecting electrical fraud using a combination of Long Short-Term Memory (LSTM) and robust Exponential and Holt-Winters Smoothing (EHWS) methods in order to enhance the accuracy and efficacy of fraud detection mechanisms. The proposed approach investigates the fraudulent behaviour of electricity consumers and unfolds in several key phases. In the first step, monthly consumption forecasts are made and the model with the most accurate results is selected. Then, the phase of detection of anomalies in economic meters and detection of cases of fraud by economic customers begins. This phase relies on the robust exponential and Holt-Winters Smoothing methods for uncovering irregular patterns indicative of potential fraud instances. The proposed model was trained and evaluated, and several experiments were carried out using a large dataset of real users from the economic sector. The dataset comprised approximately 2,000 customers and encompassed 14 years of monthly electricity usage in Bejaia, Algeria. The results of the experiments demonstrate promising performance, underscoring the efficacy of our proposed solution in effectively detecting instances of fraud, leading us to conclude that this proposition is robust and can help improve the accuracy of locating abnormal consumer behaviour and increase the company's profits.

Reconstruction of the role internal auditors in preventing fraud in the regional government: case study inspectorate of Malang City

This study aims to explain the practice of fraud prevention by internal auditors of the local government of Malang City. The research method used is critical ethnomethodology in the local government environment of Malang City. Seven informants served as key informants. The results showed that the internal auditors of the local government of Malang City have not been able to carry out their role optimally, due to the weak legitimacy of internal auditors, community involvement in fraud prevention programs, and partial fraud prevention activities. As a result, the research findings provide an overview of the regional inspectorate's institutional integration with elements authorized to handle fraud cases, such as BPKP and BPK. The findings of this study suggest that the Malang City Inspectorate should gain legitimacy through regulations, government support, and effective and efficient consultation to identify and prevent fraud.

Hybrid Features for the Identification and Categorization of Skin Cancer

The halal food control system is one of the critical aspects that need attention in sustaining the Malaysian halal industry. In practice, the existing halal food control system involves the roles of several stakeholders and is implemented independently according to their respective jurisdictions. No integrated control mechanism coordinates the roles of all stakeholders, thus resulting in fraud cases to easily happen in the industry. To effectively coordinate these roles, an integrated halal food control system must be developed. Therefore, this concept paper aims to discuss the roles of stakeholders involved in the halal food control system and to propose a conceptual halal food stakeholder control system model based on the objectives of the Islamic law framework. Information for this paper is gathered based on a literature review of previous studies related to the halal food control system. The conceptual model is expected to be a reference and guideline for all stakeholders involved and will serve as a theoretical foundation for future research in this area. Additionally, it can enhance consumer trust in Malaysia’s halal certification and support the country’s goal of becoming a leader in the global halal food industry.

The Role of Islamic Work Ethics in Moderating Influence Love of Money and Machiavellian Nature to Fraud Accounting in Management of Village Funds

The number of fraud cases in Indonesia has been increasing annually, and it has started to spread to the countryside. This turns into an irony as the hamlet continues to grow and evolve into a sophisticated community. The goal is to investigate how a love of money and other Machiavellian traits affect the tendency for fraud accounting when using village funds, as well as how the Islamic work ethic influences the interaction between the village apparatus and the community in Wonokerto District. The SEM-PLS technique is being used in this quantitative study. Primary data were employed, and 66 persons made up the sample size through the use of purposive sampling procedures in conjunction with the questionnaire method of data collecting. According to the findings, the inclination of accounting fraud was significantly influenced by both love of money and Machiavellian tendencies, and the Islamic work ethic was found to be ineffective in mitigating this effect.

A Hybrid Neural Network-Based Fast Financial Fraud Detection Model

With the increasing number of financial transactions, financial fraud has become increasingly serious for financial institutions and the public. The core idea of this model is to integrate multiple neural network structures and utilize their respective advantages to improve the performance of fraud detection. Firstly, we employed the convolutional neural network with interpretable blocks (CNNIB) convolutional neural network (CNN) to extract key features from the data to capture patterns and patterns in fraud cases. Secondly, we introduced the autoencoder generative adversarial network (AE-GAN) adversarial network to perform feature analysis on sequence data to capture temporal features in transaction sequences. Finally, we used differential detection for classification to determine whether transactions were fraudulent. An independent detection module was established to accelerate the recognition of financial fraud, and parameter indicators were optimized. Finally, a hybrid neural network model was established. The experimental results indicate that our model has achieved significant results in quickly detecting financial fraud; compared with traditional single neural network models, hybrid neural network models have significant improvements in accuracy and efficiency. In addition, we conducted in-depth analysis of the model and revealed its performance stability under different training set sizes and data distributions. Our research findings provide an effective tool for financial institutions to quickly identify financial fraud.

Potential COVID-19 test fraud detection: Findings from a pilot study comparing conventional and statistical approaches.

Some COVID-19 testing centres have reported manipulated test numbers for antigen tests/rapid tests. This study compares statistical approaches with traditional fraud detection methods. The extent of agreement between traditional and statistical methods was analysed, as well as the extent to which statistical approaches can identify additional cases of potential fraud. Outlier detection marking a high number of tests, modeling of the positivity rate (Poisson Regression), deviation from distributional assumptions regarding the first digit (Benford's Law) and the last digit of the number of reported tests. The basis of the analyses were billing data (April 2021 to August 2022) from 907 testing centres in a German city. The positive agreement between the conventional and statistical approaches ('sensitivity') was between 8.6% and 24.7%, the negative agreement ('specificity') was between 91.3% and 94.6%. The proportion of potentially fraudulent testing centres additionally identified by statistical approaches was between 7.0% and 8.7%. The combination of at least two statistical methods resulted in an optimal detection rate of test centres with previously undetected initial suspicion. The statistical approaches were more effective and systematic in identifying potentially fraudulent testing centres than the conventional methods. Testing centres should be urged to map paradata (e.g. timestamps of testing) in future pandemics.

Impact of Country Governance and Financial Development on Corporate Fraud Cases: A Cross Country Perspective

This study aims to examine the impact of country governance and financial development on corporate fraud cases across countries' perspectives from the year 2012-2018 by using country- wise data. This study runs different statistical models like descriptive, correlations, Random effect model, fixed effect model. This study chooses a fixed effect model based on the Hausman test and used Quantile regression for robustness and interquartile 0.25 to 0.75 difference regression models to find out the difference that the effect of variables are significant or insignificant at different quartile. The results of the different models show that country governance having a significant impact on corporate fraud cases and the association is negative thus improvement in country governance would expectedly reduce the corporate fraud cases. while financial development in terms of the financial market has a significant impact on corporate fraud cases and association is positive thus the development of a financial market where different financial products and instruments with less knowledge have the probability to be easily used for fraud. whereas financial development in terms of financial institutions having a significant effect on corporate fraud cases and the relationship is negative thus improvement in financial institutions like the security exchange commission of Pakistan and state bank would certainly minimize the corporate fraud cases.

Identification of fraudulent financial statements through a multi‐label classification approach

SummaryAlthough the financial audit controls in companies have advanced over the years, the number of corporate fraud instances is growing, thus raising the need for investigating the factors that can be used as early warning signals and developing effective systems for identifying financial fraud. In this paper, financial statements from 133 Greek companies listed in the Athens Stock Exchange over the period 2014 to 2019 are investigated, based on the fraud diamond theory. Financial data and corporate governance variables are used as inputs to data mining techniques to develop models that can identify patterns of irregularities in a company's financial reports. To this end, popular machine learning classification algorithms are employed in a novel multi‐label classification setting that not only identifies fraudulent cases but also considers the nature of the auditors' comments. The results indicate that the proposed multi‐label approach provides enhanced results compared to binary classification algorithms, avoiding inconsistent outputs with respect to the existence of different forms of manipulation of financial statements.

Penegakan Hukum Jasa Titip (Jastip) Tiket Konser Melalui Website Ilegal Dalam Perspektif Hukum Perlindungan Konsumen

Law enforcement related to concert ticket entrustment services through illegal websites in the perspective of consumer protection law is an important issue in the realm of consumer law. Cases of fraud in the sale of illegal concert ticketing services are being investigated by the authorities, and criminal sanctions can be given to the business actors involved. Legal protection for consumers who have been harmed is also regulated in Law Number 8 of 1999 concerning Consumer Protection, which provides legal consequences for business actors who do not fulfill their obligations, including fines and penalties. In addition, legal protection of consumers also involves coordination with relevant agencies, the delivery of information to increase consumer awareness, and consumer support in fighting for their rights. Therefore, law enforcement in the case of illegal concert ticketing services through the website involves criminal sanctions, legal protection of consumers, and efforts to increase consumer awareness

CORPORATE GOVERNANCE: A NEW TRANSFORMATION IN ACCOUNTING AND ITS IMPACT ON INVESTORS

The sole objective of every business is the progressive trend of profit and the overwhelming trust of the investors. This can be realized only when the company works systematically adhering to all codes of conduct in the interest of its stakeholders. The ever-rising cases of financial scams and fraud laid an immediate pressure on the corporate sector to reduce the frequency of the rising corporate evils and to rethink and reframe effective procedural codes, policies, and laws to prevent their further culmination in the nation. Corporate Governance (CG) emerges as the only solution to this uprooting problem in the arena of accounting.Corporate Governance (CG) is a mechanism of accountingthat involves the system and the procedures through which companies are operated and regulated. Though the entire process of CG is managed by the Board of Directors along with the Audit Committee but key role of nominating and selecting these two parties arerelied on the shareholders. The basic principles of corporate governance are fairness, accountability, transparency, and responsibility which are also known as the four pillars of CG that if effectively adopted lead to a massive reduction in corporal frauds and mismanagement and positively improve the faith of the stakeholders. This paper tries to examine the impact of corporate governance on investors. The study is based on the primary data collected from 150 respondents and regression analysis was used to derive the conclusion.

<성진사전>의 문제의식과 사회적 갈등의 해소 양상

<Seong Jinsa-Jeon> was written by Lee, Ok, a writer in the late Joseon Dynasty. It deals with a fraud case that Jinsa Seong, Hui-ryong in Sangju went through. However, the social critical consciousness of <Seong Jinsa-Jeon> draws attention to the serious economic imbalance in late Joseon society and class conflicts between the yangban and the common people, the rich and the poor through the appearance of refugees caused by famine, not just in fraud cases. In particular, the essence of <Seong Jinsa-Jeon> lies in its approach to resolving societal conflicts. The purpose of this study is to the perspective on and proposed solutions to conflict within <Seong Jinsa-Jeon> with a particular focus on the relationship between its two protagonists, Seong, Hui-ryong and a beggar. The narrator argues that Seong, Hui-ryong's self-refinement[謹身] was instrumental in resolving the conflict, exploring the broader connotation of such self-refinement. Within <Seong Jinsa-Jeon> the ‘door’ represents both the starting point of the incident and is the boundary that separates the space between Seong, Hui-ryong and the beggar. The space in <Seong Jinsa-Jeon> is divided into a rich inner space inside the door where the rich reside along the boundary of the door, and an outer space outside the door of the refugees who become beggars and wander after losing their homes. Therefore, it is recognized that the ‘door’ should be closed and protected for the rich, and open for the beggars. Nonetheless, the door also serves as a conduit that connects and associates the two worlds inside and outside. By opening the door and recognizing the beggar as another subject, Seong, Hui-ryong facilitates conflict resolution through dialogue. Face-to-face communication fosters empathy centered on the other, paving the way for conflict resolution. In other words, ‘face-to-face’ is to recognize the other outside the door as another subject like me. ‘Self-refinement’ encompasses not only self-cultivation but also placing others at the core of one's concern. The possibility of resolving such conflicts offers insights into bridging the gap between the reality of laws and legal sentiments. In a space governed by legal standards, endless opposition between legality and illegality persists due to a binary perception that merely seeks a stronger law to satisfy one's legal sentiments. Recognizing the other as a mutual subject through communication allows for attentiveness to one's conscience, unveiling hidden truth, and enabling forgiveness through empathy. This is the way to resolve conflict suggested by <Seong Jinsa-Jeon>. Although it is a short work, what <Seong Jinsa-Jeon> has achieved is truly great.

Data driven food fraud vulnerability assessment using Bayesian Network: Spices supply chain

Recognizing the vulnerabilities that arise in the spices' supply chain for food fraud, determining which products and food fraud types to assess is crucial for ensuring food quality and food safety. In this study, we developed a data driven food fraud vulnerability assessment approach based on a Bayesian Network (BN) and Failure Modes and Effects Analysis (FMEA) to predict the food fraud vulnerability level for products entering Europe including the food fraud types and potential adulterants for each step in the supply chain. The BN model was developed using a dataset based on spice-related fraud cases reported in the European Union (EU) Rapid Alert System for Food and Feed (RASFF) over the period 2005–2020. Three use cases were explored in the study: chilli, black pepper, and turmeric. The model showed a prediction accuracy higher than 95%. The vulnerability factors in the spices’ supply chain having the highest prediction accuracy for fraud are closely associated with the product concerned, the site of intervention and the country of origin of the product. A food fraud vulnerability assessment approach developed in this study could support the food industry and authorities to be more efficient in resource allocation for monitoring and verification whilst maximising their opportunity in detecting a fraudulent product.

Study on International Cooperation to Address Cross-border Telecommunication Network Fraud Offence

In recent years, under the new technological environment of the international society, cross-border telecommunication network fraud crime cases are high, and various countries are faced with difficult problems of law enforcement cooperation, such as: less channels of information exchange, difficult investigation and evidence collection, low efficiency, more obstacles to investigation and arrest cooperation, slow speed and low effectiveness of recovering stolen goods. In order to achieve effective international governance of cross-border network crimes and strengthen cooperation between China and other countries, this study is based on the collection of cross-border telecommunication network fraud crimes of international cooperation cases and literature, combined with the current situation of cross-border international cooperation in China, proposed to effectively solve the problem of cross-border telecommunication network fraud international cooperation from the prevention and governance level. In order to achieve a higher level of international cooperation and governance between countries, and continuously reduce the occurrence of cross-border telecommunication network fraud cases.

Zijing Storage Financial Fraud Case Analysis - Audit Risk Prevention for Listed Companies

Zijing Storage, as a company listed on the Science and Technology Innovation Board, originally enjoyed a high reputation in the industry for its research and development, design, and development of core technologies for Blu-ray data storage systems, as well as the production, sales, and services of optical storage media, equipment, and solutions based on this technology. However, the company’s recent financial fraud case has attracted widespread attention. This case analysis aims to deeply analyze the process, causes, and impact of Zijing Storage’s financial risk fraud, and put forward corresponding suggestions.

*Thinking on the Delisting of ST Collin due to Financial Fraud

The Securities and Futures Commission (SFC) announced 2022 financial fraud cases are common, but because of the professional managers of false manipulation is rare, so this paper selected Collin environmental protection equipment Co., Ltd. based on business ethics and professional ethics perspective on its delisting due to financial fraud analysis, respectively, on the company's accounting staff and professional managers to reflect on the perspective, and to address the problem of the corresponding solutions and recommendations, hoping for the current corporate moral governance imbalance in the reality of the problem of reflection, the company's accounting staff and professional managers. We also propose corresponding measures and suggestions to solve the problem, hoping to provide reflection and reference for the reality of the imbalance of corporate moral governance, and expecting practitioners to improve the quality of professional ethics and to be alert to the ethical edges.

Deconstructing a form of hybrid investment fraud: Examining ‘pig butchering’ in the United States

Cyber-enabled fraud has transformed, becoming more complex and making it harder for targets and law enforcement to detect its occurrence. This study aims to recontextualize a major manifestation of this transformation, a crime called hybrid investment fraud, colloquially known as pig butchering. Hybrid investment fraud describes a cyber-enabled fraud whereby criminals gain the trust of victims by forming connections and relationships, and then exploit this trust by using a series of confidence building and coercive measures designed to encourage victims to continuously invest in securities or commodities until they become unable or unwilling to continue to make payments or the offenders become unreachable. This study further aims to address the existing knowledge gap by focusing on understudied elements of this fraud, such victim and offender characteristics and the ways hybrid investment fraud is perpetrated. To achieve this, we conducted an in-depth analysis of more than 1,300 news articles and court documents between January 1, 2018, and November 1, 2023, to identify 59 cases of hybrid investment fraud targeting victims in the United States. This article both situates hybrid investment fraud within the broader fraud literature and conducts a comprehensive of analysis of hybrid investment fraud cases to identify the types of hybrid investment fraud committed, their impact, victim and offender demographics, and offenders’ tactics, tools, and methods of operation. The findings from this study can inform criminal justice practices and future research of this fraud.

Determinants of Academic Fraudulent Behavior Using the Fraud Diamond Theory Approach

Education aims to help humans to increase their potential through the field of study. Education is a process of positive character building so that a person becomes intelligent and has mental, emotional, and spiritual integrity. Education not only conveys knowledge and skills but also trains instincts, and builds habits, attitudes, and correct behavior in students. Various cases of academic fraud have made it difficult for educational institutions to achieve their goals. Fraud can occur in any field including in the academic field. This fraud is usually carried out by adults who consciously and deliberately commit fraud to obtain personal or group benefits. This study examines the effect of pressure, opportunity, rationalization, and capability on academic fraudulent behavior. The population in this study were students of the Accounting Bachelor Program at the Institute of Business and Informatics Kesatuan. The research sample was 110 respondents. This study uses primary data from a questionnaire designed using a 1-4 Likert scale. Data were analyzed using multiple linear regression. The results of the analysis show that pressure, opportunity, and rationalization have a positive effect on academic fraud behavior, while capability does not affect academic fraudulent behavior.

The Effect of Hexagon Fraud Elements on Village Fund Fraud with Religiosity as a Moderating Variable

This research is motivated by the many cases of fraud that occur, especially related to village funds which can harm the community and hinder village progress. There is a possibility of village fund fraud in Way Suluh Krui Village. There is fraud detection using the fraud hexagon theory. Differences in the results of previous research related to the detection of fraud have been observed through the fraud hexagon theory. This study aims to determine the effect of the fraud hexagon element on the possibility of fraud moderated by religiosity. This study uses quantitative research with the formulation of associative problems. The participants in this study were local village government officials totalling 32 samples. This study used primary data with a research instrument using the questionnaire method, namely distributing questionnaires, then the results were collected and analyzed using SEM-PLS analysis with SmartPLS 4 software. The results showed that while conspiracies affected town store, extortion, pressure, opportunity, legitimization, capacity, pomposity, and agreement could not be used by legalism to direct the impact of the extortion hexagon components against the chance of town reserve extortion. Keywords: fraud hexagon, village fund, religiosity

Professional Scepticism, Auditor Experience, and Self-efficacy on Audit Judgement

In the performance of all audit tasks, auditors must adhere to pre-determined standards. In Indonesia, there have been cases of fraud related to auditors, including the case of fraud at SNP Finance in 2018. Such situations can arise due to incorrect audit judgment. Factors that may impact audit judgment include professional skepticism, auditor experience, and self-efficacy. A quantitative approach is used in this research. The study population consisted of auditors at public accountant firms in Bandar Lampung. During data collection, questionnaires were administered directly to external auditors. The data were analyzed using SmartPLS. The study revealed new evidence suggesting that professional skepticism only has a limited effect on aiding auditors in their audit judgments, even when combined with extensive auditor experience. This limitation can occur when the auditor has a short working period. Conversely, self-efficacy has been shown as a beneficial factor in helping auditors make well-informed audit decisions. Keywords: professional skepticism, auditor experience, self-efficacy, audit judgment