Helping auditors identify deception through psycholinguistics

Abstract

Purpose-This paper reviews an array of psycholinguistic techniques that auditors can deploy to explore written and oral language for signs of deception. The review is drawn upon to propose some elements of a forward research agenda. Design/Methodology/Approach-Relevant literature across several disciplines is identified through key word searches of major bibliographic databases. Findings-The techniques highlighted have considerable potential for use by auditors to identify audit contexts which merit closer audit investigation. However, the techniques need further contextual empirical investigation in audit contexts. Seven specific propositions are presented for empirical testing. Originality/Value-This paper assembles literature on deceptive communication from a wide range of disciplines, and relates it to the audit context. Auditors' attention is directed to potential linguistic signals of fraud risk, and opportunities for future research are suggested. The paper is consciousness-raising, has pedagogic purpose, and suggests critical elements for a future research agenda.

Personality traits common to fraud investigators

“…But, what makes a good fraud investigator? There are studies that explore techniques that may be utilized by auditors in detecting fraud, such as linguistic analysis techniques which “help detect deception within written and oral financial communications” (Nicolaides et al , 2018). However, this study posits that the auditor’s personality may be as important as the techniques applied.…”

Detecting advance fee fraud emails using self-referential pronouns: A preliminary analysis

“…The Internet has facilitated the activities of 419ers because it offers a wider geographical coverage, access to a large number of potential victims at a low-cost and low-risk, new and readily available scamming opportunities, anonymity and concealment of identity through minimal physical contact (Blommaert & Omoniyi, 2006;Hutchings & Hayes, 2009;Ofulue, 2010;Webster & Drew, 2017). Dion (2010, p. 630) concluded that 419ers regard the Internet as an "Eldorado" In a forensic accounting context, the power of linguistic and psycholinguistics analysis techniques to understand the human behaviour reflected in fraud has been studied widely (see Nicolaides, Trafford, & Craig, 2017). Linguistic analysis techniques have been used to investigate behaviour associated with corporate fraud through study of CEO letters to shareholders, conference calls with financial analysts, and earnings press releases.…”