JOURNAL ARTICLE

Accounting fraud detection through textual risk disclosures in annual reports: From the perspective of SEC guidelines.

  • Published In: Accounting & Finance, 2025, v. 65, n. 2. P. 1837 1 of 3

  • Database: Business Source Ultimate 2 of 3

  • Authored By: Zhu, Xiaoqian; Wu, Huidong; Chang, Yanpeng; Li, Jianping 3 of 3

Abstract

This study investigates the use of textual risk disclosures in annual reports to detect accounting fraud. We developed an indicator system based on Securities and Exchange Commission (SEC) guidelines to evaluate the quality of risk disclosures. An analysis of 41,343 financial reports from US listed companies revealed that textual risk disclosures enhance fraud detection accuracy and function as an early warning system. The performance of these disclosures surpasses traditional analyses of the Management Discussion and Analysis section. Our findings highlight the value of textual risk disclosures in identifying accounting fraud and underscore the crucial role of regulatory guidelines in ensuring financial integrity. [ABSTRACT FROM AUTHOR]

Additional Information

  • Source:Accounting & Finance. 2025/06, Vol. 65, Issue 2, p1837
  • Document Type:Article
  • Subject Area:Business and Management
  • Publication Date:2025
  • ISSN:0810-5391
  • DOI:10.1111/acfi.13390
  • Accession Number:186413943
  • Copyright Statement:Copyright of Accounting & Finance is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Looking to go deeper into this topic? Look for more articles on EBSCOhost.