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Financial fraud, considered as deceptive tactics for gaining financial benefits, has recently become a widespread menace in companies and organizations. Conventional techniques such as manual verifications and inspections are imprecise, costly, and time consuming for identifying such fraudulent activities. With the advent of artificial intelligence, machine-learning-based approaches can be used intelligently to detect fraudulent transactions by analyzing a large number of financial data. Therefore, this paper attempts to present a systematic literature review (SLR) that systematically reviews and synthesizes the existing literature on machine learning (ML)-based fraud detection. Particularly, the review employed the Kitchenham approach, which uses well-defined protocols to extract and synthesize the relevant articles; it then report the obtained results. Based on the specified search strategies from popular electronic database libraries, several studies have been gathered. After inclusion/exclusion criteria, 93 articles were chosen, synthesized, and analyzed. The review summarizes popular ML techniques used for fraud detection, the most popular fraud type, and evaluation metrics. The reviewed articles showed that support vector machine (SVM) and artificial neural network (ANN) are popular ML algorithms used for fraud detection, and credit card fraud is the most popular fraud type addressed using ML techniques. The paper finally presents main issues, gaps, and limitations in financial fraud detection areas and suggests possible areas for future research.

In recent years, financial fraud of listed internet companies has emerged one after another. Under the strategic goal of full audit coverage, the problems caused by audit failure have attracted more and more attention in China. We use the bounded rationality theory to analyze the strategy selections of listed internet companies, accounting firms, and audit regulators, and put forward three hypotheses: the hypothesis of participants, the hypothesis of strategy selections, and the hypothesis of model parameters. Next, the three-party evolutionary game model is constructed, and only one stable equilibrium point is found. In numerical simulation analyses, we discuss the strategy selections of the three parties under the impact of different model parameters. The research framework of this paper enriches the existing research on financial fraud and audit supervision and deepens the evolutionary mechanism of three-party strategy selections.

Japan has seen an increase in the incidents of financial frauds over the last couple of decades. Although authorities are aware of the problem, an effective solution eludes them as fraudsters use innovative swindling methods and continually change the target group. Using a nationwide survey conducted by Hiroshima University, Japan, in 2020, this study investigated the socioeconomic and psychological profiles of victims of trending and special financial fraud such as fictitious billing fraud, loan guarantee fraud, and refund fraud. It was found that financial fraud victims' profiles are dissimilar at the aggregate and specific levels. At the specific level, victim profiles were diverse, that is, in fictitious billing fraud, loan guarantee fraud, and refund fraud cases. Males, married, and financially less satisfied people were more often victims of fictitious billing fraud; less anxious people were more likely victims of loan guarantee fraud; and older, asset-holding, and less-income-generating respondents were found to be victims of refund fraud. Our results also show some commonalities in the victims' profiles. For example, financially less-literate people were found to be more likely victims of fictitious billing fraud and loan guarantee fraud. Finally, respondents who lived with their family, those who did not have careful buying habits, and those who suffer from bouts of loneliness were found to be common victims of all types of special financial fraud. The results of our study suggest that a one-size-fits-all policy cannot effectively combat financial fraud.

This study aimed to determine the practice of internal control in modern and biblical perspectives in terms of minimizing irregularities and financial abuse at the X Church in East Java. This study used a qualitative (nonpositivistic) approach by the type of case study research. Data collection was carried out by observation and interviews with the church pastor, treasurer, the Treasury Supervisory Agency (BPP) team, and church congregations to get information about the control system in X church. Data analysis in this study used a single site data model. The results of this study indicate that the practice of internal control systems in a modern perspective (COSO) at X church has not fully implemented the five components of the internal control system according to COSO because it assumes that the church is a religious organization that does not have rigid regulations such as profit-seeking organizations. So that it becomes a reproach for the church treasurer to commit fraud against the church. In addition, the internal control system in the Biblical perspective of X church found that church had applied a dual custody system and organizational ethical values taken from the Bible to be used as a foundation in serving God, but in reality, the church treasurers abuse their power or authority and act not in accordance with God's word. The theoretical contribution to this research is to contribute to strengthening and enriching the theory of triangle fraud and the practical contribution of this research can be used as knowledge so that the church can improve the existing internal control system to minimize financial abuse in the church.

Japan has seen an increase in the incidents of financial frauds over the last couple of decades. Although authorities are aware of the problem, an effective solution eludes them as fraudsters use innovative swindling methods and continually change the target group. Using a nationwide survey conducted by Hiroshima University, Japan, in 2020, this study investigated the socioeconomic and psychological profiles of victims of trending and special financial fraud such as fictitious billing fraud, loan guarantee fraud, and refund fraud. It was found that financial fraud victims' profiles are dissimilar at the aggregate and specific levels. At the specific level, victim profiles were diverse, that is, in fictitious billing fraud, loan guarantee fraud, and refund fraud cases. Males, married, and financially less satisfied people were more often victims of fictitious billing fraud; less anxious people were more likely victims of loan guarantee fraud; and older, asset-holding, and less-income-generating respondents were found to be victims of refund fraud. Our results also show some commonalities in the victims' profiles. For example, financially less-literate people were found to be more likely victims of fictitious billing fraud and loan guarantee fraud. Finally, respondents who lived with their family, those who did not have careful buying habits, and those who suffer from bouts of loneliness were found to be common victims of all types of special financial fraud. The results of our study suggest that a one-size-fits-all policy cannot effectively combat financial fraud. [ABSTRACT FROM AUTHOR]

This study investigates how managers in firms that have committed fraud strategically use socially responsible activities in coordination with their fraudulent financial reporting practices. Using propensity score matching to select control firms that have a similar probability of fraud in the pre-fraud benchmark period, we find that the corporate social responsibility (CSR) performance of fraudulent firms in the fraud-committing period is significantly higher compared with the CSR performance of non-fraudulent control firms during this period, and compared with that during their own pre-fraud benchmark periods. This higher CSR performance by fraudulent firms is achieved by means of investing in both stakeholder and third-party CSR categories and by improving in CSR strengths. Furthermore, the increase in CSR performance is more pronounced for fraudulent firms with a weak governance environment, and for firms located in high-religiosity states. Overall, our findings suggest that fraudulent firms strategically adjust their CSR performance to coordinate with their fraudulent financial activities. [ABSTRACT FROM AUTHOR]

Objectives The goal of this study was to investigate the perception of financial exploitation and its causes and consequences by older adults who have firsthand experience of being exploited. Method Thirty-one cognitively healthy older adult participants aged 50 or older were drawn from the Finance, Cognition, and Health in Elders Study. In-depth, one-on-one interviews were conducted. Interview transcripts were analyzed using an iterative, data-driven, thematic coding scheme and emergent themes were summarized. Results Categories of financial exploitation included (a) investment fraud, (b) wage theft/money owed, (c) consumer fraud, (d) imposter schemes, and (e) manipulation by a trusted person. Themes emerged around perceived causes: (a) element of trust, (b) promise of financial security, (c) lack of experience or awareness, (d) decision-making, and (e) interpersonal dynamics. Perceived consequences included negative and positive impacts around (a) finances, (b) financial/consumer behaviors (c) relationships and trust, (d) emotional impact, and (e) future outlook. Discussion These narratives provide important insights into perceived financial exploitation experiences. [ABSTRACT FROM AUTHOR]

Copyright of Jurnal Riset Akuntansi dan Bisnis Airlangga (JRABA) is the property of Universitas Airlangga and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. 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.)

We empirically analyse the authenticity of the information provided by Chinese listed corporations. First, we construct a signalling game among listed corporations and investors. We obtain the behaviours, which are positive strategic interactions on the amounts of stock issue and positive correlation between stock issuance and profit, of listed corporations when they provide untrue information. Second, by using the dataset of 2,408 listed corporations in 2016 from CCER China Economic and Financial Database, we prove that the optimal amounts of stock issue by maximizing the amounts of financing increase as the profits of listed corporations raise. And by applying single index estimation method, our parameter estimation results show that the strategic interactions among 2,408 Chinese listed corporations on the amounts of stock issue are positive. Therefore, there exists Chinese listed corporations who do not tell the truth in proving their information. Further analysis shows that 485 out of 2,408 Chinese listed corporations do not tell the truth in providing their profits. And most of the Chinese listed corporations with unauthentic declared profits report their profits lower than their true profits to reduce tax. And those who overstate their profits are large and medium enterprises from the first and second industries. [ABSTRACT FROM AUTHOR]

Research background: Even though unintentional accounting errors leading to financial restatements look like less serious distortion of publicly available information, it has been shown that financial restatements impacts on financial markets are similar to intentional fraudulent activities. Unintentional accounting errors leading to financial restatements then affect value of company shares in the short run which negatively impacts all shareholders. Purpose of the article: The aim of this manuscript is to predict unintentional accounting errors leading to financial restatements based on information from financial statements of companies. The manuscript analysis if financial statements include sufficient information which would allow detection of unintentional accounting errors. Methods: Method of classification and regression trees (decision tree) and random forest have been used in this manuscript to fulfill the aim of this manuscript. Data sample has consisted of 400 items from financial statements of 80 selected international companies. The results of developed prediction models have been compared and explained based on their accuracy, sensitivity, specificity, precision and F1 score. Statistical relationship among variables has been tested by correlation analysis. Differences between the group of companies with and without unintentional accounting error have been tested by means of Kruskal-Wallis test. Differences among the models have been tested by Levene and T-tests. Findings & value added: The results of the analysis have provided evidence that it is possible to detect unintentional accounting errors with high levels of accuracy based on financial ratios (rather than the Beneish variables) and by application of random forest method (rather than classification and regression tree method). [ABSTRACT FROM AUTHOR]

The frequent occurrences of financial fraud in listed companies have had a serious impact on the stable development of the capital market. The Chinese company, Luckin Coffee, listed in the USA, recently confessed to fabricating transactions worth RMB2.2 billion and has received a delisting notice from NASDAQ. It can be seen that the detection and analysis of financial fraud behavior is very important not only for the internal governance of companies and for their external investors but also for regulatory agencies. This article uses a research method combining normative analysis with empirical research, utilizes a targeted selection of data from the listed companies penalized due to fictitious profits, uses the CRIME theory as the basis for normative analysis, and establishes a financial fraud identification model by means of empirical analysis. Finally, based on the research results of this article, we propose rational governance measures for countering the problems of fraud in financial statements of listed companies. [ABSTRACT FROM AUTHOR]

This paper analyzes the impact of changes in regulatory priorities and resource allocation on criminal enforcement of white‐collar criminal activities. Using the 9/11 terrorist attacks as a shock to the FBI's priorities and allocation of investigative resources, as well as variation in the Muslim population in the United States, I examine whether prioritization of counterterrorism investigations after 9/11 is associated with weaker enforcement of laws targeting white‐collar crime. I then use a difference‐in‐differences estimation to study the magnitude of any increase in white‐collar crime resulting from reduced oversight. I find a significantly greater reduction in white‐collar criminal cases referred by FBI field offices that shifted more of their investigative focus away from white‐collar crime to counterterrorism. Further, geographic areas in the jurisdictions of FBI field offices with greater shifts in attention from white‐collar crime to counterterrorism experienced greater increases in wire fraud, illegal insider‐trading activities, and fraud within financial institutions. [ABSTRACT FROM AUTHOR]

In this introduction to this special issue of the Journal we broadly consider the problem of white-collar and corporate crime in Asia. Official reports from China show the pervasiveness of current problems and the inherent dangers underlying continued economic growth and reforms. We also consider evidence bearing on the idea that Japan’s remarkably low rate of common crime is likely eclipsed by the level of white-collar and corporate crime, and briefly discuss the institutionalization of economic crime in South Korea. Issues related to the lack of study of white-collar and corporate lawbreaking in Asia are also addressed. Finally, we introduce the papers and topics of this special issue, which include comparative research on cybercrime, the enforcement of intellectual property violations, accounting fraud, financial crime, and offenses in the mutual fund industry.

The aim of the article is to formulate theoretical principles and practical recommendations for the implementation of international cooperation in the investigation of financial fraud. The subject of the study is international cooperation in the investigation of financial fraud. Methodology. The research is based on the use of general scientific and special-scientific methods and techniques of scientific knowledge. The historical and legal method enabled to determine the preconditions for the origin of financial fraud as a crime of international nature, the establishment of the institute of international cooperation in criminal proceedings. The comparative legal method enabled to compare doctrinal approaches to the differentiation of tasks and forms of international cooperation in the investigation of financial fraud. The system-structural method enabled to determine the tasks of the pretrial investigation bodies in the investigation of financial fraud considering the functional aspect of the relevant bodies and individuals. The methods of grouping and classification were the basis for the author’s approach to the definition of features of financial fraud as a crime of an international nature. The technical legal method enabled to examine the state of affairs in the legal regulation of the application of international cooperation measures in the investigation of financial fraud at the international and national levels, to identify its shortcomings, which determine the problems of practical implementation, to develop recommendations aimed at their elimination. The results of the study revealed that improvement of the international cooperation in the investigation of financial fraud involves the use of new methods and means of investigation (legal proceedings within the framework of international legal assistance, joint investigation teams, etc.); working out effective interaction with the competent authorities of foreign countries and international organizations. It is important to conclude international cooperation agreements, including interagency agreements; to improve the national legislation to comply with the provisions of international law; to harmonize the legislation of Ukraine and European states. Practical implications. In the research, financial fraud is defined as a crime of an international nature; the problematic issues of its investigation are determined; features of international cooperation in the investigation of financial fraud; the areas of its efficiency improvement are suggested. Relevance/originality. The original author’s approach to the formulation of theoretical principles and practical recommendations for the implementation of international cooperation in the investigation of financial fraud is the foundation for the elaboration of the most promising areas for the development of national legislation and practical activities in this sphere.

The purpose of this research is to analyze the influence of integrity, and compensation systems on unethical behavior, and the influence of unethical behavior on tendency of fraud. The sample used in this research is the staff of financial, and procurement divisions of a higher educational institution. The result of the research indicates that integrity has no influence on unethical behavior, whilst compensation systems have an influence on unethical behavior. The other result shows that ethical environment could drive decision based on ethical principles rather than personal interest. In other words, the tendency of fraud may be reduced by the existence of ethical environment. The results of the study may be further interpreted that appropriate system, integrity, and ethical environment are determinant to ethical behavior.

In accordance with the binding regulations of the EU law, each institution participating in the EU funds management process has in place relevant procedures preventing fraud and corruption and discouraging people from taking such actions. Managing institutions that work in cooperation with organisations which participate in the implementation of EU funds ensures the operation of an effective fraud risk management system and the implementation of effective anti‑fraud means which are designed to protect the financial interests of the European Union. The ethical norms and principles implemented in institutions which coordinate the process of EU funds management are of great importance for the process of reducing fraud related to EU funds. It was confirmed with the results of research carried out that clearly defined standards of employee conduct and determining procedures in the management and control system were the most important factors mitigating the irregularities. A special place was reserved for complying with the norms of ethical conduct and honesty by the employees of institutions managing the EU funds and development of a Code of Ethics which describes the conduct of the employees of institutions participating in the EU funds management process. The anti‑fraud procedures presented herein stem from EU law and are applicable in Poland.

In today's globalization, corporate crime is an ongoing challenge worldwide and like most other countries, it has taken epidemic form in the corporate sector of Bangladesh that gained wide attention throughout the country since the issue leaves serious threat to the nation's economic reform. Corporate crimes are usually those illegal or socially injurious actions done by corporation or by officials of any financial entity with desire to gain more wealth, make illicit profit, create monopoly business and ameliorate financial performance of the corporations. Bangladesh, being a developing country is enormously vulnerable to corporate crimes and immensely faces terrifying hardship to punish corporate criminals under the national criminal justice system. In this context, this paper highlights the root causes and mannerism of corporate crime repeatedly committed in Bangladesh. This study further seeks to examine the existing statutory laws, criminal proceedings and enforcement mechanism with particular emphasize on the challenges to ensure corporate criminal liability and penalize corporate criminals. Subsequently this paper also tries to overview other relevant statutory provisions adopted by the South Asian countries like India and Malaysia which can be noted to be useful to understand the regulating measures of corporate crime under different legal customs and may also be adopted by the legislature of Bangladesh. At the end, this paper suggests some way forwards to develop and formulate effective criminal legislation to regulate the cases of corporate crime in Bangladesh. [ABSTRACT FROM AUTHOR]

Copyright of Semestre Económico is the property of Sello Editorial de la Universidad de Medellin and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. 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.)

Contingent valuation (CV) methods are used in many contexts to estimate non-tangible costs, despite some indications that they may not be reliable. In criminal justice, CV has been used to generate "costs of crime" for street, violent, and white-collar crimes. This article explores respondent fatigue using both quantitative and qualitative indicators from an open-ended CV survey where respondents were asked how much they would be willing to pay to reduce certain crimes. Our findings reveal that willingness to pay (WTP) to reduce crime increases when both problematic response patterns and fatigue effects are accounted for in the calculation, indicating that fatigued respondents who also engage in straight lining are driving the WTP estimates down. We conclude by discussing the implications of our results for policymakers and other consumers of CV studies. [ABSTRACT FROM AUTHOR]

As the use of the internet is growing exponentially, more and more businesses such as the financial sector are operationalizing their services online. Consequently, financial frauds are increasing in number and forms around the world, which results in tremendous financial losses which make financial fraud a major problem. Unauthorized access and irregular attacks are examples of threats that should be detected by means of financial fraud detection systems. Machine learning and data mining techniques have been widely used to tackle this issue over the past few years. However, these methods still need to be improved in terms of speed computation, dealing with big data, and identify the unknown attack patterns. Therefore, in this paper, a deep learning-based method is proposed for the detection of financial fraud based on the Long Short-Term Memory (LSTM) technique. This model is aimed at enhancing the current detection techniques as well as enhancing the detection accuracy in the light of big data. To evaluate the proposed model, a real dataset of credit card frauds is utilized and the results are compared with an existing deep learning model named Auto-encoder model and some other machine learning techniques. The experimental results illustrated a prefect performance of LSTM where it achieved 99.95% of accuracy in less than a minute. [ABSTRACT FROM AUTHOR]

Bagaric and Alexander (2014) argue for fundamental reform of the sentencing process for white-collar offenders in Australia and other jurisdictions. This study has two objectives. First, it challenges Bagaric and Alexander's proposals. Second, using data from cases prosecuted by the New Zealand Serious Fraud Office, it instead proposes that white-collar offenders should not receive more lenient treatment in the justice system due to the privileged position from which the offending commences. This article suggests that an absence of restitution should be considered an aggravating factor, rather than the presence of restitution viewed as a mitigating factor; as an offender's good character is often an enabler of the offending, this should not be considered as a mitigating factor and as extra-curial punishments, such as reputation damage or loss of future employment opportunities, are short-term for white-collar offenders, there is little justification for reduced sentences and extra-curial punishments can be viewed as a natural corollary of the offending. [ABSTRACT FROM AUTHOR]

Following the lead from an interactionist fraud model, we examine whether self-regarding (SR) disposition is positively associated with vulnerability to indulge in a temptation, which could lead to fraud. This study attempts to test this link, which is central to a recently developed disposition-based fraud model (DFM). Moreover, dispositional traits could in some ways be comparable to narcissistic traits, since broadly, both are measures of personality traits. Therefore, we examine if our finding concerning SR disposition is embodied in narcissistic traits. Our descriptive study found that SR disposition is positively correlated to vulnerability to temptation, suggesting that the DFM's link from the human disposition to vulnerability to temptation appears valid. However, we found no association between SR disposition and narcissism. Upon further examination at the subscale level of narcissism, we found maladaptive entitlement/exploitativeness scale is positively correlated with SR disposition and vulnerability to temptation, while the adaptive dimension, leadership/authority, is negatively correlated with SR disposition. The study provides preliminary evidence that SR disposition, due to its vulnerability to temptation, could lead to financial fraud. Implications of the findings and suggestions for further research are offered. [ABSTRACT FROM AUTHOR]

The prevalence of smoothness of technology innovation has seen to have a skyrocket of cyberattacks. Ensuring the protection of personal information is significant about various data privacy laws. Emerging market trends have led to an increase in this field where everything from food to clothes to entertainment is being preferred online. So, this leads to the sharing of one's information online and hence paves way for such frauds. [ABSTRACT FROM AUTHOR]

The aim of this paper is to illustrate the economic fraud and organized crime do not only work with cash or conventional currencies, but also depend on cryptocurrencies. We will analyze the money laundering process and how cryptocurrencies were integrated in this process and how the law enforcement and government agencies react to this new form of currency. Cryptocurrencies phase out the need for intermediary institutions and enable financial transactions directly between peers. Owing to the transparency provided by blockchain, cryptocurrencies have been preferred by the darknet and other organised criminals. Cryptocurrencies are an emerging form of money that first was born from the creation of Bitcoin in 2009. This type of solely digital currency was meant to be a major rival of the government-backed fiat currency responsibility of the central banking system. The paper contributes to current debates and discussions on cryptocurrencies by introducing new legislation to discourage them from being used in money laundering. This article is a research paper covering cryptocurrencies and their function in moneylaundering. [ABSTRACT FROM AUTHOR]

To evaluate the applicability of the M-score model in the Chinese capital market, this research observed 190 fînandal fraud samples punished by the China Securities Regulator Coramission (CSRC) in the years from 2014 to 2018. The test results indicate that two types of errors are high, which means that the applicability of the M-score is unacceptable. Therefore, in this paper, a 9-index model is constructed by Wald's backward stepwise regression method, and the optimal threshold is set by the Beneish expected cost method (ECM). The accuracy of the modified M-score is significantly improved, especially the Type I error rate of is reduced from 70. 37 % to 19.75%. The receiver operating characteristic (ROC) curve test also proves the superior identification effect of the modified Mscore applied in the Chinese market. Finally, variables such as current ratio, fixed asset index, and equity concentration in the modified model could represent the fraud characteristics of Chinese listed companies. [ABSTRACT FROM AUTHOR]

Copyright of Business Administration Quarterly / Kwartalnik Nauk o Przedsiebiorstwie is the property of SGH Warsaw School of Economics and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. 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.)

Financial fraud, such as money laundering, is known to be a serious process of crime that makes illegitimately obtained funds go to terrorism or other criminal activity. This kind of illegal activities involve complex networks of trade and financial transactions, which makes it difficult to detect the fraud entities and discover the features of fraud. Fortunately, trading/transaction network and features of entities in the network can be constructed from the complex networks of the trade and financial transactions. The trading/transaction network reveals the interaction between entities, and thus anomaly detection on trading networks can reveal the entities involved in the fraud activity; while features of entities are the description of entities, and anomaly detection on features can reflect details of the fraud activities. Thus, network and features provide complementary information for fraud detection, which has potential to improve fraud detection performance. However, the majority of existing methods focus on networks or features information separately, which does not utilize both information. In this paper, we propose a novel fraud detection framework, CoDetect, which can leverage both network information and feature information for financial fraud detection. In addition, the CoDetect can simultaneously detecting financial fraud activities and the feature patterns associated with the fraud activities. Extensive experiments on both synthetic data and real-world data demonstrate the efficiency and the effectiveness of the proposed framework in combating financial fraud, especially for money laundering.

Objective: To examine whether financial fraud is associated with poor health sleeping problems and poor quality of life. Methods: Pilot study (n = 188) conducted in 2015–2016 in Madrid and León (Spain) by recruiting subjects affected by two types of fraud (preferred shares and foreign currency mortgages) using venue-based sampling. Information on the monetary value of each case of fraud; the dates when subjects became aware of being swindled, lodged legal claim and received financial compensation were collected. Inter-group comparisons of the prevalence of poor physical and mental health, sleep and quality of life were carried according to type of fraud and the 2011–2012 National Health Survey. Results: In this conventional sample, victims of financial fraud had poorer health, more mental health and sleeping problems, and poorer quality of life than comparable populations of a similar age. Those who had received financial compensation for preferred share losses had better health and quality of life than those who had not been compensated and those who had taken out foreign currency mortgages. Conclusion: The results suggest that financial fraud is detrimental to health. Further research should examine the mechanisms through which financial fraud impacts health. If our results are confirmed psychological and medical care should be provided, in addition to financial compensation.

The problems of preventing financial fraud and legalization of funds using mechanisms of the financial market are considered. The relevance of this problem in general and peculiar features of its research in developing economies are substantiated. The experience of organizations created to prevent the legalization of illicit funds is studied. It is determined that new organizations are created in response to the global challenges. It is justified that in Ukraine the fight against the legalization of illicit funds has actualized due to a lack of financial resources in the country, declaration of course towards European values and also as a result of the military conflict in the east of the country. The risk factors for financial fraud and illegal movement of financial flows are systematized according to the groups of conditions: pressure, favorable situation, propensity (justification). It is determined which levels of risk of generating illegal financial flows are inherent in different sectors of the economy depending on institutional factors. It is argued that the increase in the risks of illegal financial flows occurs under conditions of a low level of maturity of the institutional environment and a high level of information asymmetry. Types and tools of fraud in the financial market that increase the risks of illegal financial flows are systematized. It is determined that main types of fraud in the financial market are related to information manipulations and regulatory deficiencies. The world experience of legislative initiatives on counteracting the legalization of funds in financial markets is systematized. It is justified that, in order to prevent financial fraud and prevent legalization of illicit funds in Ukraine, it is necessary to ensure maximum transparency of information on the movement of financial flows in financial markets. In addition, regulators of the financial market should not only cooperate with each other but also prevent cases of evasion from punishment for fraud in financial markets or participation in schemes for the legalization of illicit funds.

The article is devoted to the study of the shadow economy, the common features of such an economy in different countries are clarified, and the ways for solving this problem are presented. After all, shadowing the economy is an obstacle to the socio-economic development of the state. The issue is reflected in the volume of GDP, its structure, and economic reforms are substantially slowed down due to this. Thus, the level of danger for the national economy is increasing. It should be noted that the preparation of financial statements plays a significant role in the normal functioning of each enterprise. The main purpose of this process is to provide users with the information about the financial condition, and performance of the entity. The needs for interested users will be different, but in all the cases it is common to obtain a reliable and complete array of information. Therefore, it is extremely important to search for causes, and ways of timely detection and correction of the fact of falsification of financial statements of economic entities. Indeed, due to the unbridled desire of owners to obtain a higher percentage of profits from time to time there are cases of distortion of financial statements. As a result, there is a financial fraud that causes damage to shareholders, investors and society as a whole.

The study examines the effect of board characteristics on financial statement fraud likelihood of quoted manufacturing firms in Nigeria. The scope of the study covers board attributes such as board independence, board expertise and board diligence; and the beneish M-score was used as the measure of fraud likelihood. This study utilized a quantitative research design. The sample covered 39 manufacturing companies in the Nigerian Stock Exchange (NSE) as at 2019. Secondary data was utilized for this study and the data were extracted from the annual reports of corporate organizations for the period 2013-2019 financial years. The binary logit regression was employed as the method of data analysis in the study. The findings reveal that the odd ratio of board independence, board expertise and board diligence negatively and significantly reduce the log odds of financial statement fraud in manufacturing firms in Nigeria. The study concludes that there is a need for boards to be more effective in their monitoring roles to reduce the occurrence of fraud. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Financial, Accounting & Managerial Studies is the property of Journal of Financial, Accounting & Managerial Studies and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. 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.)