Gerken, Wil liam C.; Dimmock, Stephen G. - Networks Financial Institute, Scott College of Business - 2011
We test the predictability of investment fraud using a panel of mandatory disclosures filed with the U.S. Securities … have significant power to predict fraud. Avoiding the 5% of firms with the highest ex ante predicted fraud risk would allow … an investor to avoid 29% of fraud cases and over 40% of the total dollar losses from fraud. We examine the ability of …