A classification model created from the learned
behaviour pattern is then applied to a test
sample. During the preliminary stage of an
audit, a financial statement classified as
fraudulent signals the auditor to increase
substantive testing during fieldwork.
Fanning and Cogger (1998) use an artificial
neural network (ANN) to develop a model for
detecting management fraud. Using publicly
available predictors of fraudulent financial
statements, they find a model of eight
variables with a high probability of
detection.