FORENSIC ACCOUNTING - BA124 - Fall 2012Slide 106-1

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Todays Topics

• Data Analysis Fraud Detection
• Financial Statement Analysis and Detection

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Data Analysis Fraud Detection

• Data Analysis Process
• Data Analysis Software
• Data Access Challenges
• Data Analysis Techniques

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Data Analysis Process

• Understand the business
• Brainstorm frauds
• Identify fraud symptoms
• Use technology to collect symptom data
• Analyze the data
• Investigate selected symptoms

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Data Analysis Software

• ACL
• CaseWare
• Picalo
• Microsoft Active Data

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Data Access Challenges and Tools

• Open database connectivity (ODBC)
• Text importing-extensible markup language (XML)
• Data warehousing

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Data Analysis Techniques

• Benfords Law
• Time trends
• Fuzzy matching
• Matosas and real time analyses

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Benfords Law

• Occurrence of digits in a random number sequence
• Series starting with 1s greater than 2s 2s
  greater than 3s etc.
• Effective for locating falsified trends

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Financial Statement Analysis

• Methodology
• Trends
• Ratios
• Horizontal analysis
• Vertical analysis
• What looks out of the ordinary