Employee / Vendor Matching Version 109. Objectives By the end of this course, you will be able to: Identify some common methods for perpetrating fraud.

Employee / Vendor Matching

Version 109

Objectives

By the end of this course, you will be able to:

Identify some common methods for perpetrating fraud.

Use new techniques for identifying employee fraud.

Identify how to combine tables based on an address field.

Identify how to combine tables based on a phone number field.

Identify how to combine tables based on a direct deposit account number.

Identify relevant commands to prepare your data for investigation.

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What are your goals for this class?

Agenda

1. A Fraudulent Panorama

2. Sleuthing With ACL

3. Going Through The Motions

4. Revisiting The Process

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"World-class companies who leverage technology to strengthen internal controls spend 40% less on financial compliance and control than their average peer companies." - The Hackett Group

Poll Slide 4/48

"These economic downturns are very difficult to predict, but sophisticated econometric modeling houses like Data Resources and Chase Econometrics have successfully predicted 14 of the last 3 recessions"

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A Fraudulent Panorama

1

A Fraudulent Snapshot

U.S. companies lose an average of 7% of gross revenue to fraud every year. (ACFE)

$994 billion = the total cost of fraud. (ACFE)

75% of companies surveyed experienced at least one incident of fraud in the last 12 months. (KPMG)

The average cost to companies for each incident of fraud is $200,000. (ACFE)

Approximately 60% of all corporate fraud is committed by insiders. (PwC)

Approximately half of employees who commit fraud have been with their employers for over 5 years. (ACFE)

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http://www.auditnet.org/Webinars/APFraud20091202.pdf

page 5



Internal Fraud

Main Types of Employee-Level A/P Fraud:

Vendor Master File fraud

Kickback schemes

Check fraud

T&E Fraud

P-Card fraud

Collusion with suppliers

Electronic payments

Payroll fraud

Billing schemes (Shell companies/duplicate invoicing, etc.)

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source: Auditnet.org

Some Tell-Tale Signs of Fraud

Employee Name Matches Vendor Name

Employee Initials Match Vendor Name

Employee Telephone Matches Vendor Telephone

Employee Emergency Contact Name Matches Vendor Name

Employee Address Matches Vendor Address

Employee’s Dependent Address Matches Vendor Address

Employee Identification Number Matches Vendor Tax Number

Employee Direct Deposit Number Matches Vendor DDN

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Some Tell-Tale Signs of Fraud

Employee Name Matches Vendor Name

Employee Initials Match Vendor Name

Employee Telephone Matches Vendor Telephone

Employee Emergency Contact Name Matches Vendor Name

Employee Address Matches Vendor Address

Employee’s Dependent Address Matches Vendor Address

Employee Identification Number Matches Vendor Tax Number

Employee Direct Deposit Number Matches Vendor DDN

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Vendor Master File Fraud

How it works: Absence of controls over access to Vendor Master

File (VMF) allows dishonest employees to add fictitious suppliers.

Failure to "clean" VMF at least once per year may allow inactive ones to be used to commit billing fraud.

Fraudulent alteration of existing supplier data in VMF—such as payment instructions (changing from check to automated clearing house using employee’s bank account deposit data).

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source: Auditnet.org

Poll Slide 11/48

"Two men were examining the output of the new computer in their department. After an hour or so of analyzing the data, one of them remarked: "Do you realize it would take 400 men at least 250 years to make a mistake this big ?"

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Sleuthing With ACL

2

Taming The Data Jungle

Two Big Hoops: Data Consistency

Information is often entered into a database without consistent standards for spacing, capitalization, abbreviations or field segregation.

Data Cross-ReferencingEmployee and Vendor data is typically found in separate

tables which must be joined in order to find matches.

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"The goal is to transform data into information, and information into insight" - Carly Fiorina

First Things First

Two Main Data Sources: Employee Master Table

Vendor Master Table

Slide 14/48First Things First

"The world is full of obvious things which nobody by any chance ever observes" - Arthur Conan Doyle

Second Things Second

Data Consistency: Free-ranging capitalization

Extra spaces

Bonus Characters

Mixed Characters

Varied Field Formats

Typos

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"It is a capital mistake to theorize before one has data." - Arthur Conan Doyle

The Many Faces of the Beast

Employee Name on Record in Table 1:

Joe Smith

Vendor Names on Record in Table 2:

JoE SmiTH

JOESmITH

Joe_Smith Construction

Joe-Smith

Joe.Smith-Conference

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"If you make it easy for people to steal from you, they will." - Frank Abagnale, Special Investigator to the FBI

Whereabouts in the Boondocks

Employee Address on Record:

123 North Abagnale Road

Vendor Addresses on Record:

123A N. Abagnale

123 North-Abaganale

123 ABAGNALE RD

123 Abagnale North

#123-Abagnale Rd. N.

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The story of Little Blue Riding Hood is true. Only the color has been changed to prevent an investigation. - Stan Freberg

What was that number?

Variations on Telephone Numbers:

(604) 646-4285

604 646-4285

6046464285

604.646.4285

604 646 4285

+1.604.646.4285

604 646-4285x392

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You can bank on it

Variations on Bank Deposit Numbers:

123456789-123456789012

123456789 123456789012

123-12345-1234567

123-123456-123-456-7

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"Where large sums of money are concerned, it is advisable to trust nobody." - Agatha Christie

Let’s Get Along First Before We Marry

Key Field Matching Requirements:

Field in Employee Table and field in Vendor Table must besame data type (character, numeric or date)

identical formats

identical case

identical alignment

identical lengths

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"It has long been an axiom of mine that the little things are infinitely the most important" - Arthur Conan Doyle

Producing Progeny

Results from Harmonizations and Joins are displayed in newly created fields and tables.

Your functions for scrubbing data within your Key Fields output their results into new columns.

Your command for joining data between tables output their results into new tables.

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At the beginning of all experimental work stands the choice of the appropriate technique of investigation.

Walter Rudolf Hess

Phase 1: Making Functional Harmony

Key Commands For Case Harmonization

UPPER()UPPER( "SmiTH" ) = "SMITH"

LOWER()LOWER( "SmiTH") = "smith"

PROPER()PROPER("SmiTH") = "Smith"

Syntax for column contents

UPPER( field_name) converts all text within this column into uppercase

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Key Commands For Removing Spaces

ALLTRIM()ALLTRIM (" Smith ") = "Smith"

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Key Commands For Removing Characters

INCLUDE() INCLUDE("#123-(456)-(789)" , "0123456789" ) =

"123456789"

EXCLUDE()EXCLUDE ("#12 @ 3% & $4567.89 ", "#!$%@&.") =

"123456789"

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Key Commands Setting Field Length

SUBSTRING()SUBSTRING("Smith " , 1, 8) = "Smith "

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Phase 1: Reviewing Harmony with Keys

3 Main Steps:

1. Identify key fields within each table that must conform to an identical format between them.

2. Harmonize the data in each of the key fields by applying functions.

3. Send the resulting snapshot view of the modified copy of the data to a new column which conforms to your key standardization requirements.

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Phase 2: Connecting The Dots

Combine Key fields from two different tables to create a third table containing matched records.

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Phase 2: Many Connections

Join Types:

Matched Primary Records

Matched Primary, Include All Primary Records

Matched Primary, Include All Secondary Records

Matched Primary, Include All Primary and Secondary Records

Unmatched Primary Records

Many-To-Many Matched Records

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Phase 2: Many Connections

Join Types:

Matched Primary Records

Matched Primary, Include All Primary Records

Matched Primary, Include All Secondary Records

Matched Primary, Include All Primary and Secondary Records

Unmatched Primary Records

Many-To-Many Matched Records

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The Prenuptial Agreement

Requirements:

Primary and Secondary Tables must exist in the same ACL project.

Both files must be in the same location. (i.e. both local or both on the same AX Server)

Key fields in each table need to be harmonized.

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Quiz # 1

What are the two primary considerations which must be

addressed when performing a match analysis?

1. Data Location and Data Format

2. Data Integrity and Data Consistency

3. Data Access and Data Cross-referencing

4. Data Location and Data Access

5. Data Consistency and Data Cross-referencing

Quiz # 2 Slide 32/48

What are functions?

1. Built-in Commands used for identifying matches between fields.

2. Built-in Commands used for harmonizing data.

3. Built-in Commands used for scrubbing data.

4. Built-in Commands used for formatting data.

5. Built-in Commands used for automating specific tasks.


Identify the order in which the following steps need to be

followed:

Identify Key data fields in each table

Scrub the data in order to harmonize it between tables

Create new columns for storing clean data

Create new tables for storing the results of the newly joined data

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Going Through The Motions

3

Our Three Amigos

Demos for combining tables on:

Bank Deposit Account Number

Telephone Number

Employee Name

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"Anything that is illegal, the data is going to be suspect." - Vernon Briggs

Amigo Numero Uno

Joining on Bank Deposit Account Fields

Function Used

INCLUDE() INCLUDE("123-123456-123-456-7", "0123456789") =

"1231234561234567"

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Amigo Numero Uno Slide 37/48

Joining on Bank Deposit Account Fields

Demo

Amigo Numero Dos

Joining on Telephone Number Fields

Functions Used

VALUE()VALUE ("(555) 555-1234", 0) = -5,555,551,234

ABS()ABS(-5,555,551,234) = 5,555,551,234

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Amigo Numero Dos


Nesting Functions

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vendor_phone = (555) 555-1234

VALUE( vendor_phone, 0 ) = -5555551234

ABS( VALUE( vendor_phone, 0 )) = 5555551234

Amigo Numero Dos Slide 40/48


Demo

Amigo Numero Tres

Joining on Employee Name Fields

Functions Used

INCLUDE() INCLUDE("Joe Smith", "smith") = "mith"

UPPER()UPPER(“joe smith“) = “JOE SMITH”

ALLTRIM()ALLTRIM(“ joe smith ”) = “joe smith”

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Amigo Numero Tres


Functions Used

SPLIT()SPLIT("Joe Smith Consulting", " ", 2) = "Smith"

BLANKS()BLANKS(5) = " "

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Amigo Numero Tres Slide 43/48


Demo




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Revisiting The Process

4

Slide 48/48Your Questions

Questions You Have Asked

Slide 49/48Stepping Through It All

1. Open the relevant table.

2. Create a view containing the fields you are going to use.

3. Identify the key field(s) you will be working with to create your join.

4. Review the format of the key field(s) and determine what needs to be done to harmonize them.

5. Create Expressions using functions with the Expression Editor to harmonize your fields.

6. Create new columns containing computed fields to display your harmonized data.

7. Invoke the Join command and send the results to a new table for you to inspect.

















































Next Steps…

Feedback Survey

Downloadable MaterialHandout

Data files

Assessment with Printable Certificate

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Employee / Vendor Matching Version 109. Objectives By the end of this course, you will be able to: Identify some common methods for perpetrating fraud.

Documents

employee fraud

employee information

vendor information

perpetrating fraud

overview of fraud

perpetrated fraud

vendor accounts

address field