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overloaded with the job of detection of fraud. Various systems and model is essential to
reduce the burden of the auditors. The major scandals like Enron, Satyam and Worldcom
etc. are involving corporate accounting fraud, which arose from the disclosure of
misdeeds conducted by trusted executives of large public corporations.

Statistics and Data mining methods have been used successfully to discover activities
such as detection of money laundering, bankruptcy prediction, insurance and credit card
fraud, telecommunications fraud etc. However, Financial Statement Fraud is more
complicated and detecting them is challenging. People likely to question about how to do
it and how effective it is.
Advanced quantitative techniques include sophisticated methods derived from statistics
and artificial intelligence, creates opportunities to develop techniques and models to
detect the fraud in early stage and hence helps auditors to detect the fraud in early stage.
This in turn increases transparency, accountability and disclosure of correct information
helps protecting all stakeholders in particular and economy as a whole.

Key words: Financial statement, financial statement fraud, Fraudulent Company,
Financial ratios, data mining algorithms

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