Detecting Fraud in Earnings Calls: A Linguistic Analysis

Have you ever wondered if linguistic analysis could detect fraudulent remarks made by corporate executives during quarterly conference calls? In this study, researchers analyzed over 1,000 utterances from earnings calls of a company accused of making misleading statements and restating their financial reports. They identified distinct linguistic and vocalic features that differentiated restatement-related utterances from non-restatement ones.

The results suggest that these tools have the potential to identify potentially fraudulent utterances, particularly in unscripted responses, highlighting the importance of language and vocal cues in detecting financial misconduct.

Read the paper: Which Spoken Language Markers Identify Deception in High-Stakes Settings? Evidence From Earnings Conference Calls