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The use of social media to detect corporate fraud: A case study approach

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  • Xiong, Feng
  • Chapple, Larelle
  • Yin, Haiying

Abstract

Social media is a rapid and dynamic medium of communication that forms a crucial component of the modern business toolkit. It can be used to detect corporate fraud by tapping into collective user wisdom, also known as the wisdom of crowds. This article highlights both the potential and limitations of social media in detecting corporate fraud by examining information from traditional media and social media for a recent corporate fraud case (i.e., Empowered Products Inc.). Using text analysis of information posted on traditional media compared to social media, this article illustrates how social media provides an increased level of relevant information in a faster manner. By using wisdom of crowds in this way, social media platforms such as Twitter can improve organizational knowledge quality. We identify methods for managers to utilize social media to improve their organizational knowledge management.

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  • Xiong, Feng & Chapple, Larelle & Yin, Haiying, 2018. "The use of social media to detect corporate fraud: A case study approach," Business Horizons, Elsevier, vol. 61(4), pages 623-633.
    • Handle: RePEc:eee:bushor:v:61:y:2018:i:4:p:623-633
    DOI: 10.1016/j.bushor.2018.04.002
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    Cited by:

    1. Xin Xu & Feng Xiong & Zhe An, 2023. "Using Machine Learning to Predict Corporate Fraud: Evidence Based on the GONE Framework," Journal of Business Ethics, Springer, vol. 186(1), pages 137-158, August.
    2. Can, Umit & Alatas, Bilal, 2019. "A new direction in social network analysis: Online social network analysis problems and applications," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 535(C).
    3. Xu, Weidong & Luo, Zijun & Li, Donghui, 2024. "Investor–firm interactions and corporate investment efficiency: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 84(C).
    4. Ziqing Xie & Dickson K. W. Chiu & Kevin K. W. Ho, 2024. "The Role of Social Media as Aids for Accounting Education and Knowledge Sharing: Learning Effectiveness and Knowledge Management Perspectives in Mainland China," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 2628-2655, March.
    5. Wu, Chunying & Xiong, Xiong & Gao, Ya, 2022. "The role of different information sources in information spread: Evidence from three media channels in China," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 327-341.
    6. Li, Wanli & Lai, Yin & Zhong, Yufen, 2024. "The closer the better: Supplier geographic proximity and corporate information disclosure violation," The North American Journal of Economics and Finance, Elsevier, vol. 69(PA).

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