Anti-Corruption Disclosure Prediction Using Deep Learning

Victor Gayuh Utomo; Tirta Yurista Kumkamdhani; Galih Setiarso

doi:10.15575/join.v7i2.840

Anti-Corruption Disclosure Prediction Using Deep Learning

Victor Gayuh Utomo, Tirta Yurista Kumkamdhani, Galih Setiarso

Abstract

Corruption gives major problem to many countries. It gives negative impact to a nation economy. People also realized that corruption comes from two sides, demand from the authority and supply from corporate. On that regard, corporates may have their part in fight against corruption in the form of anti- corruption disclosure (ACD). This study proposes new method of ACD prediction in corporate using deep learning. The data in this study are taken from every companies listed in Indonesia Stock Exchange (IDX) from the year 2017 to 2019. The companies can be categorized in 9 categories and the data set has 8 features. The overall data has 1826 items in which 1032 items are ACD and the other 794 items are non-ACD. In this study, the deep neural network or deep learning is composed from input layer, output layer and 3 hidden layers. The deep neural network uses Adam optimizer with learning rate 0.0010, batch size 16 and epochs 500. The drop out is set to 0.05. The accuracy result from deep learning in predicting ACD is considered good with the average training accuracy is 74.76% and average testing accuracy is 76.37%. However, the loss result isn’t good with average training loss and testing loss are respectively 51.76% and 50.96%. Since the aim of the study to find the possibility of deep learning as alternative of logistic regression in ACD prediction, accuracy comparison from deep learning and logistic regression is held. Deep learning has average prediction accuracy of 76.37% is better than logistic regression with average accuracy of 67.15%. Deep learning also has higher minimum accuracy and maximum accuracy compared to logistic regression. This study concludes that deep learning may give alternatives in ACD prediction compared the more common method of logistic regression.

Keywords

Anti-corruption Disclosure; Deep learning; Logistic regression; Machine learning

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