Effective General Ledger and Journal Entry Fraud Detection Using Data Analytics
Data Analytics for Fraud Detection 10-30-13 presentation · DATA ANALYTICS FOR FRAUD DETECTION 2//...
38
experience perspective // CPAs & ADVISORS STATE INTERNAL AUDIT ADVISORY BOARD Presented by Jeremy Clopton, CPA, CFE, ACDA
Transcript of Data Analytics for Fraud Detection 10-30-13 presentation · DATA ANALYTICS FOR FRAUD DETECTION 2//...
experience perspective //
CPAs & ADVISORS
STATE INTERNAL AUDIT ADVISORY BOARDPresented by Jeremy Clopton, CPA, CFE, ACDA
experience perspective //
CPAs & ADVISORS
DATA ANALYTICS FOR FRAUD DETECTION
2 // experience perspective
3 CRITICAL MESSAGES1. You should be using data analytics
2. You have the capability to perform data analytics
3. This session will help confirm points 1 & 2
3 // experience perspective
…processes & activities designed to obtain & evaluate data to extract useful information and answer strategic questions...
WHAT IS DATA ANALYTICS
4 // experience perspective
Where is fraud occurring in my company or organization?
TODAY’S STRATEGIC QUESTION
5 // experience perspective
CONSIDER THE FOLLOWING…
6 // experience perspective
Source: Report of Investigation ‐ Office of Tax and Revenue Investigation Special Committee – District of Columbia
experience perspective //
CPAs & ADVISORS
7 REASONS TO USE DATA ANALYTICS
7 // experience perspective
SAMPLING IS NOT EFFECTIVE
Reason #1
8 // experience perspective
You’re not likely to find the needle unless you look at the entire haystack.
KEY TAKEAWAY #1
9 // experience perspective
DATA RESIDES IN MULTIPLE SYSTEMS &
MULTIPLE TABLES
Reason #2
10 // experience perspective
11 // experience perspective
The most powerful feature of data analytics software is the ability to compare data from multiple systems and/or sources.**
KEY TAKEAWAY #2
12 // experience perspective
**My personal opinion; not a proven fact.
SHORTAGE OF THUMBTACKS & YARN
Reason #3
13 // experience perspective
14 // experience perspective
Employer
UPS Store
Employee Home
15 // experience perspective
16 // experience perspective
Analytics can help find relationships based on multiple attributes.
KEY TAKEAWAY #3
17 // experience perspective
NO AUDIT PROGRAM TO IDENTIFY “KICKBACKS”
Reason #4
18 // experience perspective
Relationships, patterns and trends are key areas for fraud detection. These aren’t in the APG.
KEY TAKEAWAY #4
19 // experience perspective
DOUBLES AS A PREVENTATIVE MEASURE
Reason #5
20 // experience perspective
Paper‐based & limited electronic testing
(Sampling)
Data Analytics(100% coverage, ad hoc
electronic testing)
Continuous Auditing(Automated analytics,
100% coverage)
Reactive ProactiveResponsiveness
21 // experience perspective
Continuous auditing is data analytics at the speed of business.
KEY TAKEAWAY #5
22 // experience perspective
INVESTIGATORS USE DATA ANALYTICS
Reason #6
23 // experience perspective
Investigators have developed analytics for years. With development comes resources and a shorter learning curve for you.
KEY TAKEAWAY #6
24 // experience perspective
7% OF FRAUD FOUND BY ACCIDENT
Reason #7
25 // experience perspective
26 // experience perspective
Fraudsters are intentional about fraud; we need to be intentional about finding and preventing it.
KEY TAKEAWAY #7
27 // experience perspective
experience perspective //
CPAs & ADVISORS
DATA ANALYTICS & YOUR COMPANY
28 // experience perspective
A GAME PLAN
29 // experience perspective
experience perspective //
CPAs & ADVISORS
6 STEP PROCESS TO ANALYTICS
30 // experience perspective
Assess Risk
Define Objectives
Obtain Data
Develop & Apply Procedures
Analyze Results
Manage Results
31 // experience perspective
CHALLENGE TO CONSIDER – DATA QUALITY
417-865-8701, (417)865-8701, 8658701, 417-8658701
Missoura, MO, Mis, Miss, MZ, MS, Miz, Mizz
PO Box 34, P.O. Box 34, Box 34, Bx 34, P.O Box 34
Clopton, Clapton, Clompton, Clampton, Cloptin
12345, 12345a, 12345-1, 012345
32 // experience perspective
PROCEDURE DEVELOPMENT
Single‐Purpose (Individual) Tests
Groups of Similar Tests
Repetitive Individual Tests
Automation of Groups of Tests
Groups of Repetitive Similar
Tests
33 // experience perspective
experience perspective //
CPAs & ADVISORS
CLOSING THOUGHTS
34 // experience perspective
3 CRITICAL MESSAGES1. You should be using data analytics
2. You have the capability to perform data analytics
3. You now believe points 1 & 2
35 // experience perspective
RESOURCES• IIA Global Technology Audit Guides Continuous Auditing Fraud Prevention and Detection in an Automated World Data Analysis
• ISACA White PaperData Analytics – A Practical Approach
• http://www.acl.com• http://www.audimation.com
36 // experience perspective
Jeremy Clopton, CPA, CFE, ACDASenior Managing ConsultantBKD, LLP Phone: 417.865.8701Email: [email protected]
Social MediaBlog: bkdforensics.comTwitter: @j313LinkedIn: http://www.linkedin.com/in/jeremyclopton/
37 // experience perspective
THANK YOU
FOR MORE INFORMATION // For a complete list of our offices and subsidiaries, visit bkd.com or contact:
Jeremy Clopton, CPA, CFE, ACDA// Senior Managing [email protected] // 417.865.8701
