New tools to fight research fraud
Research misconduct is a multifaced phenomenon, the full extent of which is difficult to estimate. Nonetheless, it has significant negative economic, financial, personal and social implications for individuals, institutions, research, science and the relation between science and society. The EU-funded project DEFORM took an auditing approach to the problem by repurposing existing risk-assessment auditing tools. The study examined the social and economic costs of research misconduct, through various analytic approaches and suggested ways with the potential to signal the existence of fraudulent behaviour. Work undertaken revealed strong correlations between research misconduct perceived prevalence and occurrence, and mishaps in regulatory and monitoring systems, as well as institutional and structural failures. These in turn are further linked to pressures to secure funding, produce quantifiable fast-track results and researchers’ working conditions. Most important however is the tension between what research and science promises, or is purported to promise, and what it can deliver; a form of ‘promiseomics’ which puts much strain on institutions and researchers to create or foster conditions of research misconduct or fraud. As such, project research revealed that in the context of financial analysis systems that emphasise profit maximisation and devalue virtuous practices, fraud incentives are inbuilt to current asset valuation systems. Therefore, the potential of fraud and research misconduct is continuously present. The recent high-profile case of Volkswagen’s diesel cars’ faked emission data was one of the analysed case studies. In this case the result was prison sentences for some of the company’s executives and billions in fines. The cost of risk Investigators reasoned that analysing promises may offer a way of estimating the risk of fraud. At the core of DEFORM’s research is the notion that research misconduct originates from the tension between results promised and the difficulty of achieving them. The concept applies equally to businesses and individual researchers under publication pressures and has been examined in relation to individual, institutional and structural issues. DEFORM developed two models (top-down and bottom-up), each using the proven economic concepts of productivity and valuation analysis. The key variable is the cost of risk. The models predict that if it is possible to estimate that figure, then it must also be possible to value the absence of risk. New financial accounting terms “If we want to reduce fraud,” says DEFORM’s senior researcher Caroline Gans Combe, “it is necessary to identify in the balance sheets the potential cost of fraud.” Ultimately, DEFORM’s proposals would add a new term – risk avoidance valuation – to profit and loss statements. Researchers suggest that the term be incorporated into future accounting standards. Doing so would provide a useful indicator for financiers, auditors and insurers. Next, DEFORM researchers plan further validation of their models. The consortium will also address the remaining obstacles to implementation and acceptance. Specifically, investigators will be working on a redesign of research governance. The project recommends clearer sanctions and definitions of institutional competence. The initiative also requires clear guidelines about liability, which the team will be preparing. The group plans to lobby for the professionalisation of research management. The new concepts developed in DEFORM may allow for the identification of scientific fraud signals. Future accounting practices may routinely look for these.
DEFORM, fraud, risk, scientific, cost of fraud, promise tension, promiseomics, auditor, risk avoidance valuation