# Benchmarking Generalization in Financial Statement Fraud Detection: robust evaluation and novel tasks

arXiv: https://arxiv.org/abs/2607.19259 · HTML: https://mlsanity.com/paper/2607.19259/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Builds on 8 of its 40 references that are in the map.
- First posted on arXiv 21 Jul 2026.

## Builds on (most cited first, 8 of 8)

- [LoRA: Low-Rank Adaptation of Large Language Models](https://mlsanity.com/paper/2106.09685/) (2021)
- [LLaMA: Open and Efficient Foundation Language Models](https://mlsanity.com/paper/2302.13971/) (2023)
- [Sentence-BERT: Sentence Embeddings using Siamese BERT-Networks](https://mlsanity.com/paper/1908.10084/) (2019)
- [Qwen3 Technical Report](https://mlsanity.com/paper/2505.09388/) (2025)
- [XGBoost: A Scalable Tree Boosting System](https://mlsanity.com/paper/1603.02754/) (2016)
- [LlamaFactory: Unified Efficient Fine-Tuning of 100+ Language Models](https://mlsanity.com/paper/2403.13372/) (2024)
- [Nomic Embed: Training a Reproducible Long Context Text Embedder](https://mlsanity.com/paper/2402.01613/) (2024)
- [Fino1: On the Transferability of Reasoning-Enhanced LLMs and Reinforcement Learning to Finance](https://mlsanity.com/paper/2502.08127/) (2025)

## Abstract (arXiv)

Financial statement fraud detection (FSFD) is crucial for market integrity but faces challenges from increasingly sophisticated schemes and under-utilized textual data in financial reports. Existing methods often rely on random data splits, leading to overoptimistic performance estimates that do not reflect real-world generalization to new companies or future periods. To address this recurring problem with the state of the art, we propose a robust FSFD framework leveraging Large Language Models (LLMs) to integrate both structured financial data and unstructured textual information from financial reports. We provide a more realistic evaluation through a novel and challenging benchmark task called Company-Isolated FSFD (CI-FSFD). We construct and make publicly available a comprehensive U.S. company dataset combining financial statements, summarized MD&A text, and fraud labels. Our approach achieves the best performance on the challenging CI-FSFD task, demonstrating the critical value of textual data and robust evaluation for reliable financial fraud detection.