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RESHAPE: Explaining Accounting Anomalies in Financial Statement Audits by enhancing SHapley Additive exPlanations

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  • Ricardo Muller
  • Marco Schreyer
  • Timur Sattarov
  • Damian Borth

Abstract

Detecting accounting anomalies is a recurrent challenge in financial statement audits. Recently, novel methods derived from Deep-Learning (DL) have been proposed to audit the large volumes of a statement's underlying accounting records. However, due to their vast number of parameters, such models exhibit the drawback of being inherently opaque. At the same time, the concealing of a model's inner workings often hinders its real-world application. This observation holds particularly true in financial audits since auditors must reasonably explain and justify their audit decisions. Nowadays, various Explainable AI (XAI) techniques have been proposed to address this challenge, e.g., SHapley Additive exPlanations (SHAP). However, in unsupervised DL as often applied in financial audits, these methods explain the model output at the level of encoded variables. As a result, the explanations of Autoencoder Neural Networks (AENNs) are often hard to comprehend by human auditors. To mitigate this drawback, we propose (RESHAPE), which explains the model output on an aggregated attribute-level. In addition, we introduce an evaluation framework to compare the versatility of XAI methods in auditing. Our experimental results show empirical evidence that RESHAPE results in versatile explanations compared to state-of-the-art baselines. We envision such attribute-level explanations as a necessary next step in the adoption of unsupervised DL techniques in financial auditing.

Suggested Citation

  • Ricardo Muller & Marco Schreyer & Timur Sattarov & Damian Borth, 2022. "RESHAPE: Explaining Accounting Anomalies in Financial Statement Audits by enhancing SHapley Additive exPlanations," Papers 2209.09157, arXiv.org.
  • Handle: RePEc:arx:papers:2209.09157
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    File URL: http://arxiv.org/pdf/2209.09157
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    References listed on IDEAS

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    1. Marco Schreyer & Timur Sattarov & Christian Schulze & Bernd Reimer & Damian Borth, 2019. "Detection of Accounting Anomalies in the Latent Space using Adversarial Autoencoder Neural Networks," Papers 1908.00734, arXiv.org.
    2. Giorgio Visani & Enrico Bagli & Federico Chesani & Alessandro Poluzzi & Davide Capuzzo, 2022. "Statistical stability indices for LIME: Obtaining reliable explanations for machine learning models," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 73(1), pages 91-101, January.
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    Cited by:

    1. Wei Jie Yeo & Wihan van der Heever & Rui Mao & Erik Cambria & Ranjan Satapathy & Gianmarco Mengaldo, 2023. "A Comprehensive Review on Financial Explainable AI," Papers 2309.11960, arXiv.org.

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