Notice of RetractionExternal detection of listed Companies´ accounting fraud: Case studies based on breakpoint test

Notice of Retraction

After careful and considered review of the content of this paper by a duly constituted expert committee, this paper has been found to be in violation of IEEE´s Publication Principles.

We hereby retract the content of this paper. Reasonable effort should be made to remove all past references to this paper.

The presenting author of this paper has the option to appeal this decision by contacting TPII@ieee.org.

This paper puts forward a market-response-based approach to detecting accounting fraud. We analyze the market response caused by accounting fraud. When accounting fraud happens, or investors perceive it, the time series structure of abnormal stock return should change significantly, which will provide opportunities for judging whether a company has issued false accounting pronouncements. The approach consists of following steps: the test of breakpoints, the interpretation of accounting pronouncements, the analysis of fundamental conditions and the detection of possible fraud aspects. We explain the principles of ICSS algorithm, and use the algorithm to test structure breakpoints. Furthermore, we apply the approach to case studies of listed companies´ accounting fraud. The results show that stock return will response bitterly to accounting fraud, and we can detect companies´ accounting fraud efficiently by carrying out the steps of the approach.