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We take a data mining approach to characterize distributional patterns of financial/accounting data. We especially analyze underlying information uncertainty in heterogeneous forms of records using the measure of ‘entropy’. In today’s accounting information systems, effective detection of transaction frauds become a key component for the success of e-commerce systems. A popular method in the current practice is the use of Benford’s law to examine distributional patterns of parsed digits. We extend the view of this approach to precisely quantify information uncertainty in terms of entropy. We present a taxonomic analysis on distributional patterns at the leading digit level. While existing research is focused on the variation pattern itself, we perform detailed computations to derive numeric measures which represent underlying information uncertainty. We compared the entropy states of the leading digit distributions against Benford’s law. Goodness of fit and regression analysis results further provide practical insights in recognition of potential transaction fraud.

We consider a network of overlapping auctions and quantify the impact of overlap on agent behavior. Eliminating spatial and temporal constraints to connect physically apart customers, eauction mechanism has become one of the key components in current e-commerce system. One interesting aspect is that often there are multiple timely-overlapping mechanisms which form a network of information transfer. Since the signals revealed from an auction can influence the strategic space of users in the other ongoing auctions, it is crucial to view the market as a network in which overall interactions of mechanisms determine the global equilibrium. We present a taxonomic analysis on heterogeneous bidder behavior in a networked e-auction market. We classify the bidders’ participation and bidding strategy at individual mechanism level and at the market level. The outcomes of different strategies are compared in terms of the likelihood of winning and the relative surplus. We observe the outcome heavily relies on user strategies. We also examine whether heterogeneous mechanism formats having different winner/price determination rules influence bidder entry decision.

Derivatives were at the center stage of many financial scandals, incidents of massive trading losses, as well as the subprime mortgage crisis of 2008. Monitoring of derivatives transactions is desperately needed. As derivatives trading systems are computerized, management and accountants need to acquire IT knowledge and skills necessary to evaluate computerized internal controls on derivatives. To prepare management and accountants for derivatives control monitoring, this paper discusses implementation of computerized internal controls in relational database management systems over the life cycle of derivatives transactions.

Online auctions enable market-level interactions or interdependency of outcomes, which were not observed in physical auctions. One such set of interactions takes place when multiple auctions are conducted to sell identical items by an identical seller in an overlapping manner. This research focuses on overlapping auctions, their interactions, and the related impact on bidder behavior. We introduce the notion of auction "overlap" and examine the impact of market-level factors such as the price information revealed from prior auctions, degree of overlap, the auction format, and the overall market supply on a given auction's price. Despite a competitive setting, we find that, ceteris paribus, English auctions, on average, extract roughly 8.6 percent more revenue per unit than multiunit uniform-price Dutch auctions. We discover that the overlapping auctions attract institutional bidders, who bid in a participatory manner across multiple auctions, and that such bidders exert a downward pressure on auction prices. We find that overlap of an auction with other competing auctions has a significant negative influence on prices, and information about following auctions has a stronger negative influence than information about prior closing auctions. By estimating the expected price difference, we provide practitioners, who have private knowledge of their internal holding costs, a benchmark that can be used in deciding between using overlapping single-unit English auctions and multiunit Dutch auctions.