For many years now the transcripts of conference calls in which CEOs and other executives discuss quarterly profit results have been available on FD Wire (for the Fair Disclosure law that requires corporate information to be distributed evenly to all parties.) Two Stanford researchers analyzed the language in tens of thousands of calls, correlated it with which profit results turned out to be bogus, and teased out the weasel words that signaled fraud, reports The Economist.

If the CEO swears during the conference call (Enron's Jeff Skilling being the most famous example), he might be a liar. If s/he uses superlatives and refers to knowledge that supposedly "everybody" knows, he might be a liar. If he or she speaks in smoothly composed cadences rather than hesitating over the language, s/he is probably speaking from a script that could have been written to fudge and deceive.

The Economist expects mendacious CEOs and their flacks to adjust.

This study should help investors glean valuable new insights from conference calls. Alas, this benefit may diminish over time. The real winners will be public-relations firms, which now know to coach the boss to hesitate more, swear less and avoid excessive expressions of positive emotion. Expect “fantastic” results to become a thing of the past.