Sage Journals: Discover world-class research

Abstract

Accounting for finances is maintaining records of analyzing financial activities to produce financial declarations, income, and counting cash flow, and balance sheets. Verifying the completeness and correctness of financial accounts is the procedure known as auditing. Auditors guarantee the accuracy of financial data supplied by accounting and the integrity of accounting procedures. This study determines to establish an artificial intelligence model, named Dynamic Sea Lion Optimization (DSLO), for enhancing the efficiency of financial accounting and auditing processes. In this study, taxpayers functioning under an average tax regime, efficiency, and grow a fraud forecast method based on Dynamic Sea Lion Optimized Efficient Random Forest (DSLO-ERF). A comprehensive dataset is used to evaluate predictive models for detecting tax fraud. The data was preprocessed using normalization for the obtained data. Fraud, audit, administrative cost sharing, and external economic activity among the significant fraud predictors. The proposed framework is tested from 2018 to 2022 on the whole population of taxpayers and profit. In a comparative analysis, the proposed method performs various evaluation metrics. The result revealed that compared with other current methods, the efficacy of the suggested technique is better in terms of accuracy (98.621%), precision (99.517%), and recall (99.612%) in this condition, the proposed DSLO-ERF method also had the quickest training time of 0.10 seconds. The research focuses on an innovative approach to achieving greater operational efficiency and financial integrity, as well as the strategic advantages of AI adoption in the financial industry.

Keywords

financial accounting auditing fraud prediction taxpayers Dynamic Sea Lion Optimized Efficient Random Forest (DSLO-ERF)

Get full access to this article

View all access options for this article.

References

Zhao

Wang

. A big data-driven financial auditing method using convolution neural network. IEEE Access 2023; 11: 41492–41502. DOI: 10.1007/978-3-030-66252-3_2304.

Alharasis

Tarawneh

Shehadeh

, et al. Reimbursement costs of auditing financial assets measured by fair value model in Jordanian financial firms’ annual reports. Sustainability 2022; 14(17): 10620. DOI: 10.1016/j.accinf.2022.100598.

Achmad

Ghozali

Pamungkas

. Hexagon fraud: detection of fraudulent financial reporting in state-owned enterprises Indonesia. Economies 2022; 10(1): 13. DOI: 10.1109/ICMLA55696.2022.00150.

Fikri

Rida

Abghour

, et al. A blockchain architecture for trusted sub-ledger operations and financial audit using decentralized microservices. IEEE Access 2022; 10: 90873–90886. DOI: 10.51594/farj.v6i2.782.

Lyu

Zhang

Dang

, et al. A novel framework for water accounting and auditing for efficient management of industrial water use. J Clean Prod 2023; 395: 136458. DOI: 10.1109/TPSISA52974.2021.00032.

van Nieuw Amerongen

CNM

Duits

Gordon

, et al. Proposed international standard on auditing financial statements of less complex entities: IAASB IAAER roundtables—breakout 1 authority and groups. Financ Manag Account 2023; 34(1): 5–35. DOI: 10.1111/jifm.12162.

Almaqtari

. The role of IT governance in the integration of AI in accounting and auditing operations. Economies. 2024;12(8):19. DOI: 10.52566/msu-econ.9(4).2022.46-55.

Sargent

. Replacing financial audits with blockchain: the verification issue. J Comput Inf Syst 2022; 62(6): 1145–1153. DOI: 10.1080/08874417.2021.1992805.

Rahman

Chen

Al-Faryan

MAS

, et al. Audit services and financial reporting quality: the role of accounting expertise auditors. Cogent Business & Management 2023; 10(1): 2164142. DOI: 10.1080/23311975.2022.2164142.

10.

Baker

Kumar

Pandey

, et al. Contemporary Accounting Research: a retrospective between 1984 and 2021 using bibliometric analysis. Contemp Account Res 2023; 40(1): 196–230. DOI: 10.1111/1911-3846.12779.

11.

Perdana

Lee

Kim

. Prototyping and implementing Robotic Process Automation in accounting firms: benefits, challenges and opportunities to audit automation. Int J Account Inf Syst 2023; 51: 100641. DOI: 10.1016/j.accinf.2023.100641.

12.

Almaqtari

. The role of IT governance in the integration of AI in accounting and auditing operations. Economies 2024; 12(8): 199. DOI: 10.1016/j.aos.2022.101349.

13.

Hsieh

Brennan

. Issues, risks, and challenges for auditing crypto asset transactions. Int J Account Inf Syst 2022; 46: 100569. DOI: 10.1108/JAAR-06-2022-0146.

14.

Lin

Yen

. Auditor rotation, key audit matter disclosures, and financial reporting quality. Adv Account 2022; 57: 100594. DOI: 10.1016/j.accinf.2022.100598.

15.

Anderson

Hobson

Sommerfeldt

. Auditing non‐GAAP measures: signaling more than intended. Contemp Account Res 2022; 39(1): 577–606. DOI: 10.1080/21552851.2022.2143827.

16.

Ferry

Midgley

Murphie

, et al. Auditing governable space—a study of place‐based accountability in England. Financ Account Manag 2023; 39(4): 772–789. DOI: 10.1111/faam.12321.

17.

Bakumenko

Elragal

. Detecting anomalies in financial data using machine learning algorithms. Systems 2022; 10(5): 130. DOI: 10.1016/j.resglo.2022.100093.

18.

Thottoli

. The tactician role of FinTech in the accounting and auditing field: a bibliometric analysis. Qualitative Research in Financial Markets 2024; 16(2): 213–238. DOI: 10.1016/j.ijleo.2022.170321.

19.

van Brenk

Renes

Trompeter

. Auditing in the public interest: reforming the profession by building on the strengths of the existing accounting firms. Crit Perspect Account 2022; 83: 102184. DOI: 10.1016/j.cpa.2020.102184.

20.

Baugh

Hallman

Kachelmeier

. A matter of appearances: how does auditing expertise benefit audit committees when selecting auditors? Contemp Account Res 2022; 39(1): 234–270. DOI: 10.1111/1911-3846.12894.

21.

Jiang

Lau

, et al. Financial reporting consequences of natural disasters: evidence from the impact of resource constraints at audit offices on non-affected clients. J Account Publ Pol 2022; 41(6): 107012. DOI: 10.1016/j.jaccpubpol.2022.107012.

22.

Jarah

Al Jarrah

Al-Zaqeba

, et al. The role of internal audit to reduce the effects of creative accounting on the reliability of financial statements in the Jordanian Islamic banks. Int J Financ Stud 2022; 10(3): 60. DOI: 10.3390/ijfs10030060.

23.

Cao

Chen

, et al. Artificial intelligence in accounting and finance: challenges and opportunities. IEEE Access 2023; 11: 129100–129123. DOI: 10.1080/02102412.2021.2009298.

24.

Zhao

Bai

. Financial fraud detection and prediction in listed companies using SMOTE and machine learning algorithms. Entropy 2022; 24(8): 1157. DOI: 10.3390/e24081157.

25.

Xiuguo

Shengyong

. An analysis on financial statement fraud detection for Chinese listed companies using deep learning. IEEE Access 2022; 10: 22516–22532. DOI: 10.1109/ACCESS.2022.3153478.

26.

Rodgers

Al-Shaikh

Khalil

. Protocol analysis data collection technique implemented for artificial intelligence design. IEEE Trans Eng Manag 2023; 71: 6842–6853. DOI: 10.1109/TEM.2023.3269291.

Research on the application and efficiency improvement of artificial intelligence in financial accounting and auditing

Abstract

Keywords

Get full access to this article

References