Charalambos Spathis

Data Mining techniques for the detection of fraudulent financial statements

This paper explores the effectiveness of Data Mining (DM) classification techniques in detecting firms that issue fraudulent financial statements (FFS) and deals with the identification of factors associated to FFS. In accomplishing the task of management fraud detection, auditors could be facilitated in their work by using Data Mining techniques. This study investigates the usefulness of Decision Trees, Neural Networks and Bayesian Belief Networks in the identification of fraudulent financial statements. The input vector is composed of ratios derived from financial statements. The three models are compared in terms of their performances.

Detecting false financial statements using published data: some evidence from Greece

This paper examines published data to develop a model for detecting factors associated with false financial statements (FFS). Most false financial statements in Greece can be identified on the basis of the quantity and content of the qualifications in the reports filed by the auditors on the accounts. A sample of a total of 76 firms includes 38 with FFS and 38 non‐FFS. Ten financial variables are selected for examination as potential predictors of FFS. Univariate and multivariate statistical techniques such as logistic regression are used to develop a model to identify factors associated with FFS. The model is accurate in classifying the total sample correctly with accuracy rates exceeding 84 per cent. The results therefore demonstrate that the models function effectively in detecting FFS and could be of assistance to auditors, both internal and external, to taxation and other state authorities and to the banking system.

Detecting Falsified Financial Statements: A Comparative Study using Multicriteria Analysis and Multivariate Statistical Techniques

Falsifying financial statements involves the manipulation of financial accounts by overstating assets, sales and profit, or understating liabilities, expenses or losses. This paper explores the effectiveness of an innovative classification methodology in detecting firms that issue falsified financial statements (FFS) and the identification of the factors associated to FFS. The methodology is based on the concepts of multicriteria decision aid (MCDA) and the application of the UTADIS classification method (UTilités Additives DIScriminantes). A sample of 76 Greek firms (38 with FFS and 38 non-FFS) described over ten financial ratios is used for detecting factors associated with FFS. A jackknife procedure approach is employed for model validation and comparison with multivariate statistical techniques, namely discriminant and logit analysis. The results indicate that the proposed MCDA methodology outperforms traditional statistical techniques which are widely used for FFS detection purposes. Furthermore, the results indicate that the investigation of financial information can be helpful towards the identification of FFS and highlight the importance of financial ratios such as the total debt to total assets ratio, the inventories to sales ratio, the net profit to sales ratio and the sales to total assets ratio.

Measuring the success of the Greek Taxation Information System

The transformation of many governments all around the world into new forms, namely, electronic government (e-Government), could not leave the Greek government unaffected. Therefore, it initiated an e-Government project related to national information systems and finance services, the Greek Taxation Information System (TAXIS). The purpose of this paper is to investigate the success of TAXIS from the perspective of expert employees, who work in public taxation agencies. This topic is interesting, because TAXIS is applied in a tax-driven country, under a mandatory setting. Also, it is the first time that the success of this project is examined, from the perspective of employees, using IS success models. The study adapts DeLone and McLean [DeLone, W. H., & McLean, E. R. (2003). The DeLone and McLean model of information systems success: A ten year update. Journal of Management Information Systems, 19(4), 9-30] and Seddons [Seddon, P. B. (1997). A respecification and extension of the DeLone and McLean model of IS success. Information Systems Research, 8(3) 240-253] information systems success models. The model developed includes the constructs of information, system and service quality, perceived usefulness and user satisfaction. The results provide evidence that there are strong connections between the five success constructs. All hypothesized relationships are supported, except for the relationship between system quality and user satisfaction. The empirical evidence and discussion presented can help the Greek Government improve and fully exploit the potential of TAXIS as an innovative tool for taxation purposes.

The usefulness of ERP systems for effective management

Enterprise resource planning (ERP) systems offer distinct advantages in this new business environment as they lower operating costs, reduce cycle times and (arguably) increase customer satisfaction. This paper examines, via a questionnaire, the underlying reasons why companies choose to adopt ERP systems, their impact on management process including implementation problems encountered. The empirical evidence confirms a number of benefits derived from ERP systems particularly for management process but also, problems encountered. Results provide the basis for future research on the potential of ERP systems, for more effective business integration.

Enterprise resource planning systems’ impact on accounting processes

The advent of the IT‐led era and the increased competition have forced companies to react to the new changes in order to remain competitive. Enterprise resource planning (ERP) systems offer distinct advantages in this new business environment as they lower operating costs, reduce cycle times and (arguably) increase customer satisfaction. This study examines, via an exploratory survey of 26 companies, the underlying reasons why companies choose to convert from conventional information systems (IS) to ERP systems and the changes brought in, particularly in the accounting process. The aim is not only to understand the changes and the benefits involved in adopting ERP systems compared with conventional IS, but also to establish the best way forward in future ERP applications. The empirical evidence confirms a number of changes in the accounting process introduced with the adoption of ERP systems.

Bank service quality: evidence from five Balkan countries

Purpose – Despite the rapid growth and internationalisation of services and financial services in particular, managers realise that to successfully leverage service quality as a global competitive tool, they first need to correctly identify the antecedents of what the international consumer perceives as service quality. This paper aims to examine the differences: in perceptions of service quality; and in the ranking of quality dimension between the bank customers of five Balkan countries: Greece, Bulgaria, Albania, FYROM and Serbia.Design/methodology/approach – Bahia and Nantel proposed a specific scale for measuring perceived service quality in retail banking consisting of six dimensions of service quality: effectiveness and assurance; access; price; tangibles; service portfolio; and reliability. This instrument was used for collecting data in the context of banking services from the five Balkan countries. T‐test and factor analysis were employed to answer the research questions.Findings – The results su...

Assessing the benefits of using an enterprise system in accounting information and management

Purpose – This paper examines the impact of decisions stemming from the new ERP system on the accounting information and management implemented at a large public university in Greece, based on perceived benefits according to users’ expectations and perceptions.Design/methodology/approach – Structured questionnaires were used in two measurement points (pre‐ and post‐implementation) in the frame of longitudinal research. The statistical analysis methods employed factor analysis and Cronbachs alpha to evaluate the scale and t‐test to assess the significance of the means values between the two periods.Findings – The results show that, one‐year post‐implementation, users’ perceptions are more positive compared with their expectations from the pre‐implementation period. The empirical data confirm a number of benefits derived from the new ERP system, particularly in relation to accounting information and management. The new ERP system significantly contributes towards increased flexibility in information provis...

Managing service quality in banks: customers’ gender effects

This paper discusses the service quality of Greek banks on the basis of their customers’ perceptions, and analyses how gender differences affect customers’ perceptions of service quality dimensions such as effectiveness and assurance, access, price, tangibles, service portfolio, and reliability. The results of an empirical study of 1,260 customers of Greek banks generally support the hypothesis that gender affects service quality perceptions and the relative importance attached to various banking service quality dimensions. This paper provides important information for bank managers to use in developing operational, human resource, and marketing strategies, and in targeting those strategies in terms of the gender differences in quality perceptions among their customers.

Using client performance measures to identify pre-engagement factors associated with qualified audit reports in Greece

The purpose of this paper is to test the extent to which client (corporate) performance measures can be used to enhance the ability to discriminate between the choice of a qualified or unqualified (clean) audit report. Audit firms face the risk of losing the client if they issue a qualification. On the other hand, failing to qualify exposes the auditor to potential lawsuits and loss of reputation. We examined the financial statements, auditors’ opinions, and financial statements notes for companies in Greece that received a qualified audit report and for those that received an unqualified audit report. We modeled the