Webinar series from FraudResourceNet LLC on Preventing and Detecting Fraud Using Data Analytics. Recordings of these Webinars are available for purchase from our Website fraudresourcenet.com This Webinar focused on fraud detection using data analytic software (Excel, ACL, IDEA) FraudResourceNet (FRN) is the only searchable portal of practical, expert fraud prevention, detection and audit information on the Web. FRN combines the high quality, authoritative anti-fraud and audit content from the leading providers, AuditNet ® LLC and White-Collar Crime 101 LLC/FraudAware. The two entities designed FRN as the “go-to”, easy-to-use source of “how-to” fraud prevention, detection, audit and investigation templates, guidelines, policies, training programs (recorded no CPE and live with CPE) and articles from leading subject matter experts. FRN is a continuously expanding and improving resource, offering auditors, fraud examiners, controllers, investigators and accountants a content-rich source of cutting-edge anti-fraud tools and techniques they will want to refer to again and again.
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Internal auditors require appropriate skills and should use available technological tools to help them maintain a successful fraud management program that covers prevention, detection, and investigation. As such, all audit professionals — not just IT audit specialists — are expected to be increasingly proficient in areas such as data analysis and the use of technology to help them meet the demands of the job.
Statistics students are asked to perform a simple task. Create a matrix of heads and tails by recording the results of 200 coin flips. The professor reviews the results and easily identifies the students that just made up the results without flipping a coin. How did he know?
You can read about the biggest fraud I detected as an internal auditor in the June 2012 Internal Auditor magazine. There were no tips or red flags and I had worked at this company for 10 years. The fraud scheme was simple, saving credit balances on canceled insurance accounts in accounts receivable, an area I assumed the external auditors covered thoroughly.
Understanding symptoms of fraud is the key to detecting fraud. A symptom of fraud may be defined as a condition which is directly attributable to dishonest or fraudulent activity. It may result from the fraud itself or from the attempt to conceal the fraud.
Once the data has been obtained it must be read into your data analysis tool. Before commencing testing, it is important the data is reconciled back to the "client’s" system. Potential errors are:
Requesting the wrong data
Being supplied with the wrong data (and/or wrong time)
Errors on the extraction of data from the host system
Problems when transferring the data to PC or media
Which one of the following is not a critical task asdefined by the IIA Red Book?
1.Achievement of the organization’s strategic objectives2.Reliability & integrity of financial & operational information3.Effectiveness & efficiency of operations & programs4.Fraud Prevention and Detection5.Compliance with laws, regulations, policies, procedures
1. The data is good2. The analysis is correct3. The necessary data is readily available4. The data speaks for itself5. Management will terminate the offender6. Only the perpetrator knew about the scam7. Best practice at one company will work for all8. One “tool” will work in all situations9. Fraud can’t happen in your company10.Know tools, competencies, company, industry!