Using Data Analytics to Detect Fraud

Size: px

Start display at page:

Download "Using Data Analytics to Detect Fraud"

Ralph Harrell
6 years ago
Views:

1 Using Data Analytics to Detect Fraud Data Analysis Tests for Detecting Payroll and Expense Reimbursement Schemes 2018 Association of Certified Fraud Examiners, Inc.

2 Payroll Schemes Fraudsters cause their employers to issue them a compensation payment to which they are not entitled: Ghost employee schemes False salaries and wages schemes Commission schemes 2018 Association of Certified Fraud Examiners, Inc. 2 of 27

3 Ghost Employee Schemes A ghost employee is someone who is on the payroll register but who does not actually work for the company Association of Certified Fraud Examiners, Inc. 3 of 27

4 Red Flags of Ghost Employee Schemes Employee information anomalies Payroll register anomalies Payroll check anomalies Bonus or pay increase anomalies Employee time-off trends 2018 Association of Certified Fraud Examiners, Inc. 4 of 27

5 Discussion Scenario: Ghost Employee Schemes What types of tests would you run to identify ghost employees on the payroll? What files and documents would you need to run these tests? Aside from a ghost employee scheme, what might be some other explanations for any exceptions found? 2018 Association of Certified Fraud Examiners, Inc. 5 of 27

6 Tests for Ghost Employee Schemes Tests to identify anomalies in: Employee information Payroll register Payroll checks Bonus or pay increases Employee time-off trends 2018 Association of Certified Fraud Examiners, Inc. 6 of 27

7 False Salaries and Wages Schemes The fraudsters manipulate compensation-related factors to increase their pay Association of Certified Fraud Examiners, Inc. 7 of 27

8 Red Flags of False Salaries and Wages Schemes Gross salary anomalies Pay rate anomalies Net pay anomalies Anomalies in number of hours worked Anomalies in number of parts produced 2018 Association of Certified Fraud Examiners, Inc. 8 of 27

9 Discussion Scenario: False Salaries and Wages Schemes What types of tests would you run to identify a false salaries and wages scheme? What files and documents would you need to run these tests? Aside from a false salaries and wages scheme, what might be some other explanations for any exceptions found? 2018 Association of Certified Fraud Examiners, Inc. 9 of 27

10 Tests for False Salaries and Wages Schemes Tests to identify anomalies in: Gross salary Pay rate Net pay Number of hours worked Number of parts produced 2018 Association of Certified Fraud Examiners, Inc. 10 of 27

11 Commission Schemes Schemes in which fraudsters alter their commission rate or falsely report the amount of sales they made: Inflated sales price Inflated quantity sold Sales to fictitious customers Sales in improper periods 2018 Association of Certified Fraud Examiners, Inc. 11 of 27

12 Red Flags of Commission Schemes Accounts receivable anomalies Customer information anomalies Salesperson performance anomalies Sales transaction or trend anomalies 2018 Association of Certified Fraud Examiners, Inc. 12 of 27

13 Discussion Scenario: Commission Schemes What types of tests would you run to determine whether Tom is involved in a commission scheme? What files and documents would you need to run these tests? Aside from a commission scheme, what might be some other explanations for any exceptions found? 2018 Association of Certified Fraud Examiners, Inc. 13 of 27

14 Tests for Commission Schemes Tests to identify anomalies in: Accounts receivable Customer information Salesperson performance Sales transactions or trends 2018 Association of Certified Fraud Examiners, Inc. 14 of 27

15 Expense Reimbursement Schemes Fraudster makes an improper claim for the reimbursement of expenses: Mischaracterized expenses Fictitious expenses Overstated expenses Multiple reimbursements 2018 Association of Certified Fraud Examiners, Inc. 15 of 27

16 Red Flags of Expense Reimbursement Schemes Expense date and time anomalies Expense location anomalies Expense vendor anomalies Expense amount anomalies Expense claims lacking information Unusual trends in reimbursement levels 2018 Association of Certified Fraud Examiners, Inc. 16 of 27

17 Discussion Scenario: Expense Reimbursement Schemes What types of tests will you run to identify mischaracterized expenses? What files and documents will you need to run these tests? Aside from fraud, what might be some other explanations for any exceptions found? 2018 Association of Certified Fraud Examiners, Inc. 17 of 27

18 Tests for Expense Reimbursement Schemes Tests to identify anomalies in: Expense date and times Expense locations Expense vendors Expense amounts Reimbursement levels 2018 Association of Certified Fraud Examiners, Inc. 18 of 27

ACL ESSENTIALS. Get insight into your ERP process health, compliance & financial exposure SALARIES & PAYROLL

ACL ESSENTIALS. Get insight into your ERP process health, compliance & financial exposure SALARIES & PAYROLL ACL ESSENTIALS Get insight into your ERP process health, compliance & financial exposure SALARIES & PAYROLL Page Analytic Name Employee names on the payroll that match a vendor PR Analytic 01 Ex-employees