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Author: Christopher D. Westphal
Publisher:
ISBN:
Category : Corporation reports
Languages : en
Pages : 112
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Author: Christopher D. Westphal
Publisher:
ISBN:
Category : Corporation reports
Languages : en
Pages : 112
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Author: Ila Dutta
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Data mining is a multi-disciplinary field of science and technology widely used in developing predictive models and data visualization in various domains. Although there are numerous data mining algorithms and techniques across multiple fields, it appears that there is no consensus on the suitability of a particular model, or the ways to address data preprocessing issues. Moreover, the effectiveness of data mining techniques depends on the evolving nature of data. In this study, we focus on the suitability and robustness of various data mining models for analyzing real financial data to identify financial restatements. From data mining perspective, it is quite interesting to study financial restatements for the following reasons: (i) the restatement data is highly imbalanced that requires adequate attention in model building, (ii) there are many financial and non-financial attributes that may affect financial restatement predictive models. This requires careful implementation of data mining techniques to develop parsimonious models, and (iii) the class imbalance issue becomes more complex in a dataset that includes both intentional and unintentional restatement instances. Most of the previous studies focus on fraudulent (or intentional) restatements and the literature has largely ignored unintentional restatements. Intentional (i.e. fraudulent) restatements instances are rare and likely to have more distinct features compared to non-restatement cases. However, unintentional cases are comparatively more prevalent and likely to have fewer distinct features that separate them from non-restatement cases. A dataset containing unintentional restatement cases is likely to have more class overlapping issues that may impact the effectiveness of predictive models. In this study, we developed predictive models based on all restatement cases (both intentional and unintentional restatements) using a real, comprehensive and novel dataset which includes 116 attributes and approximately 1,000 restatement and 19,517 non-restatement instances over a period of 2009 to 2014. To the best of our knowledge, no other study has developed predictive models for financial restatements using post-financial crisis events. In order to avoid redundant attributes, we use three feature selection techniques: Correlation based feature subset selection (CfsSubsetEval), Information gain attribute evaluation (InfoGainEval), Stepwise forward selection (FwSelect) and generate three datasets with reduced attributes. Our restatement dataset is highly skewed and highly biased towards non-restatement (majority) class. We applied various algorithms (e.g. random undersampling (RUS), Cluster based undersampling (CUS) (Sobhani et al., 2014), random oversampling (ROS), Synthetic minority oversampling technique (SMOTE) (Chawla et al., 2002), Adaptive synthetic sampling (ADASYN) (He et al., 2008), and Tomek links with SMOTE) to address class imbalance in the financial restatement dataset. We perform classification employing six different choices of classifiers, Decision three (DT), Artificial neural network (ANN), Naïve Bayes (NB), Random forest (RF), Bayesian belief network (BBN) and Support vector machine (SVM) using 10-fold cross validation and test the efficiency of various predictive models using minority class recall value, minority class F-measure and G-mean. We also experiment different ensemble methods (bagging and boosting) with the base classifiers and employ other meta-learning algorithms (stacking and cost-sensitive learning) to improve model performance. While applying cluster-based undersampling technique, we find that various classifiers (e.g. SVM, BBN) show a high success rate in terms of minority class recall value. For example, SVM classifier shows a minority recall value of 96% which is quite encouraging. However, the ability of these classifiers to detect majority class instances is dismal. We find that some variations of synthetic oversampling such as 'Tomek Link + SMOTE' and 'ADASYN' show promising results in terms of both minority recall value and G-mean. Using InfoGainEval feature selection method, RF classifier shows minority recall values of 92.6% for 'Tomek Link + SMOTE' and 88.9% for 'ADASYN' techniques, respectively. The corresponding G-mean values are 95.2% and 94.2% for these two oversampling techniques, which show that RF classifier is quite effective in predicting both minority and majority classes. We find further improvement in results for RF classifier with cost-sensitive learning algorithm using 'Tomek Link + SMOTE' oversampling technique. Subsequently, we develop some decision rules to detect restatement firms based on a subset of important attributes. To the best of our knowledge, only Kim et al. (2016) perform a data mining study using only pre-financial crisis restatement data. Kim et al. (2016) employed a matching sample based undersampling technique and used logistic regression, SVM and BBN classifiers to develop financial restatement predictive models. The study's highest reported G-mean is 70%. Our results with clustering based undersampling are similar to the performance measures reported by Kim et al. (2016). However, our synthetic oversampling based results show a better predictive ability. The RF classifier shows a very high degree of predictive capability for minority class instances (97.4%) and a very high G-mean value (95.3%) with cost-sensitive learning. Yet, we recognize that Kim et al. (2016) use a different restatement dataset (with pre-crisis restatement cases) and hence a direct comparison of results may not be fully justified. Our study makes contributions to the data mining literature by (i) presenting predictive models for financial restatements with a comprehensive dataset, (ii) focussing on various datamining techniques and presenting a comparative analysis, and (iii) addressing class imbalance issue by identifying most effective technique. To the best of our knowledge, we used the most comprehensive dataset to develop our predictive models for identifying financial restatement.
Author: United States. Congress. House. Committee on Oversight and Government Reform
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 356
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Author: Hendrik Frederikus Maria Gertsen
Publisher:
ISBN: 9789058922144
Category :
Languages : en
Pages : 375
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The primary objective of financial statements is to provide capital market participants with information that enables them to make informed decisions. They also serve to alleviate the so-called 'agency problem' - through true and fair disclosures, financial statements contribute to keeping the interest of outsiders (shareholders) aligned with those of the insiders (executives). Material errors, however, will render these financial statements unreliable and can cause great uncertainties to investors and other stakeholders. Subsequent correction of these errors - restatements - often leads to the following question: Can management still be trusted? And subsequently: Where were the gatekeepers? The avalanche of accounting scandals a few years ago, coupled with the current global credit crises, reiterate that our knowledge of corporate governance failures needs continuous upgrading. This dissertation contributes to understanding why the watchdogs did not bark, and also dissects how common human biases affect the mechanisms of corporate monitoring roles, in particular during restatement crises. Three connected studies were conducted. A first qualitative study develops a model for gauging restatement severity and provides insight into the forces blurring the 20/20 vision on restatement situations. A second quantitative study is the first study to comprehensively elicit analysts' perceptions of CEO pressures and behaviours during restatements ....
Author: Gary B. Gorton
Publisher: Oxford University Press
ISBN: 0199986886
Category : Business & Economics
Languages : en
Pages : 296
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Book Description
Before 2007, economists thought that financial crises would never happen again in the United States, that such upheavals were a thing of the past. Gary B. Gorton, a prominent expert on financial crises, argues that economists fundamentally misunderstand what they are, why they occur, and why there were none in the U.S. from 1934 to 2007. Misunderstanding Financial Crises offers a back-to-basics overview of financial crises, and shows that they are not rare, idiosyncratic events caused by a perfect storm of unconnected factors. Instead, Gorton shows how financial crises are, indeed, inherent to our financial system. Economists, Gorton writes, looked from a certain point of view and missed everything that was important: the evolution of capital markets and the banking system, the existence of new financial instruments, and the size of certain money markets like the sale and repurchase market. Comparing the so-called "Quiet Period" of 1934 to 2007, when there were no systemic crises, to the "Panic of 2007-2008," Gorton ties together key issues like bank debt and liquidity, credit booms and manias, moral hazard, and too-big-too-fail--all to illustrate the true causes of financial collapse. He argues that the successful regulation that prevented crises since 1934 did not adequately keep pace with innovation in the financial sector, due in part to the misunderstandings of economists, who assured regulators that all was well. Gorton also looks forward to offer both a better way for economists to think about markets and a description of the regulation necessary to address the future threat of financial disaster.
Author: United States. Congress. House. Committee on the Budget
Publisher:
ISBN:
Category : Budget
Languages : en
Pages : 440
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Author: Timothy F. Geithner
Publisher: Crown
ISBN: 0804138605
Category : Biography & Autobiography
Languages : en
Pages : 610
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Book Description
New York Times Bestseller Washington Post Bestseller Los Angeles Times Bestseller Stress Test is the story of Tim Geithner’s education in financial crises. As president of the Federal Reserve Bank of New York and then as President Barack Obama’s secretary of the Treasury, Timothy F. Geithner helped the United States navigate the worst financial crisis since the Great Depression, from boom to bust to rescue to recovery. In a candid, riveting, and historically illuminating memoir, he takes readers behind the scenes of the crisis, explaining the hard choices and politically unpalatable decisions he made to repair a broken financial system and prevent the collapse of the Main Street economy. This is the inside story of how a small group of policy makers—in a thick fog of uncertainty, with unimaginably high stakes—helped avoid a second depression but lost the American people doing it. Stress Test is also a valuable guide to how governments can better manage financial crises, because this one won’t be the last. Stress Test reveals a side of Secretary Geithner the public has never seen, starting with his childhood as an American abroad. He recounts his early days as a young Treasury official helping to fight the international financial crises of the 1990s, then describes what he saw, what he did, and what he missed at the New York Fed before the Wall Street boom went bust. He takes readers inside the room as the crisis began, intensified, and burned out of control, discussing the most controversial episodes of his tenures at the New York Fed and the Treasury, including the rescue of Bear Stearns; the harrowing weekend when Lehman Brothers failed; the searing crucible of the AIG rescue as well as the furor over the firm’s lavish bonuses; the battles inside the Obama administration over his widely criticized but ultimately successful plan to end the crisis; and the bracing fight for the most sweeping financial reforms in more than seventy years. Secretary Geithner also describes the aftershocks of the crisis, including the administration’s efforts to address high unemployment, a series of brutal political battles over deficits and debt, and the drama over Europe’s repeated flirtations with the economic abyss. Secretary Geithner is not a politician, but he has things to say about politics—the silliness, the nastiness, the toll it took on his family. But in the end, Stress Test is a hopeful story about public service. In this revealing memoir, Tim Geithner explains how America withstood the ultimate stress test of its political and financial systems.
Author: Ensar Yılmaz
Publisher: Taylor & Francis
ISBN: 1000163342
Category : Business & Economics
Languages : en
Pages : 247
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Book Description
Incorporating a broad range of economic approaches, Understanding Financial Crises explores the merits of various arguments and theories which have been used to explain the causes of financial crises. The book explores eight of these different explanations: underconsumption, debt accumulation, financialization, income inequality, financial fragility, tendency of rate of profit to fall, human behavior, and global imbalances. The introduction provides a brief overview of each argument along with a comparison of their relative merits. Each chapter then introduces one of the arguments, explores a historical case, and focuses on the insights that can be gleaned into the global crisis in 2007–2008. The book draws on insights from various schools of thought including post-Keynesian economics, Marxist economics, behavioral economics, neoclassical economics, and more, to provide a pluralist overview of the causes of economic crises in general and the Great Recession in particular. This book marks a significant contribution to the literature on economic and financial crises, political economy and heterodox economics. It is well suited to academicians, practitioners, and financial analysts working within the relevant fields.
Author: Paolo Savona
Publisher: Ashgate Publishing, Ltd.
ISBN: 9781409402718
Category : Political Science
Languages : en
Pages : 358
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Book Description
This collection gathers experts from Africa, North America, Asia and Europe to examine international policy responses to the 2008 global financial crisis. In doing so they reveal the implications for international cooperation, coordination and institutional change in global economic governance, and identify ways to reform and even replace the architecture created in the mid 20th century in order to meet the global challenges of the 21st.
Author: Mathias Dewatripont
Publisher: Princeton University Press
ISBN: 0691168199
Category : Business & Economics
Languages : en
Pages : 148
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Book Description
The financial crisis that began in 2007 in the US swept the world, producing substantial bank failures and forcing unprecedented state aid for the crippled global financial system. This book draws critical lessons from the causes of the crisis and proposes important regulatory reforms.
