Year 17 – 2004 – Part 1 – Direct Deposit

This was the year that I re-published my second book “Fraud Detection: A Revealing Look at Fraud (2004).  This dealt with obtaining, verifying and analyzing the data to support fraud prevention, detection and investigation.  However, it was also relevant to regular internal audit analyses. I thought I would do something a little different this week – so here is a fraud analysis story.  It is based on an actual fraud…

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Year 16 – 2003 – Recruitment Process

People, even those that perform analytics, often think that data analysis can only be applied to financial-type audits.  I have tried to highlight other types of audits where analytics played a significant role including transportation, inventory, and hazardous materials (environmental).   In that vein, I offer you analysis that was part of an HR recruitment audit. he organization was an international/national police force.  Like many police forces, it needed a fairly…

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Year 16 – 2003 – Accounts Receivable

It was beginning to almost become routine – get data, perform analysis, identify significant results, make recommendations and, often, transfer the analysis jobs to management for continuous monitoring.  This doesn’t mean that there were problems: obtaining the data, persuading audit teams to use analysis, and sometimes convincing management to address the control problems.  It was a challenge and it kept the job interesting. I was also performing consulting from time…

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Year 15 – 2002 – Part 2 – IT Audit

Second part of article on making IT Audits more effective and value-added …. The next area that will need to be address by CAEs is ensuring that risk-based audit plans are relevant and that selected audits provide maximum value to senior management.  Today’s business environment changes rapidly to adjust to market conditions, evolving legislation and economic forces; and the risk-based audit plan must keep pace with this rapid change if…

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Year 15 – 2002 – Part 1 – IT Audit

Many audit shops rely on IT auditors to support their use of data analytics; however, the IT audits typically focus on general and application controls.  Around this time I wrote an article for the EDPACS magazine which encouraged IT auditors to look beyond the black box – to look at how IT supports, drives, and impact business processes.  I have included below. IT Auditors need to come out of the…

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Year 14 – 2001 – Fraud Analytics – part 2

The “Big one that got Away” – involved hundreds of millions of dollars in contracts for hardware and software maintenance over ten years.  I ran a couple of tests to highlight red flags related to fraud risks and identified the fraudster a couple of times – but didn’t pursue the issue enough to uncover the fraud. The first red flag was identified when I performed an audit to determine if…

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Year 14 – 2001 – Fraud Analytics – part 1

After my year of consulting in numerous private sector companies I felt that my experience not only with ACL, but also with risk assessment and fraud risk assessment in particular had grown.  While ACL’s basic command set was powerful, there were a number of techniques that I had used specifically for fraud that were not (at this time) included in the basic ACL command set.  They required the use of…

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Year 13 – 2000 – Back to Work after a Year of Consulting

This was another exciting year for me.  First, in 1999, I had decided to take a year off without pay and do some sub-contracting for ACL (I forgot to mention this in 1999 post).   It gave me the opportunity to really expand my analysis skills.  Also, I worked on the development of DirectLink for SAP which really forced me to develop a better understanding of SAP – something that has…

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Year 12 – 1999 – Part 2 – Drilling down into A/P risks

Technically, we were still in the planning phase of the A/P audit – but had already identified several areas of risk that needed to be analyzed further. The early payments represented a potential fraud.  If you paid within 15 days, you should receive an early payment discount of between 1.5 -2.5% depending on the vendor’s terms.   In addition to reviewing the invoices with ‘immediate’ payment terms, we calculated the difference…

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