Professional Documents
Culture Documents
&
FORENSIC AUDIT
By
Dhruv Seth
ds@sethspro.com | www.sethspro.com
CONTENT
Data Mining
Methods of doing
Difference with standard auditing
Benefits and Risks
Patterns in data
Utilisation in different audits
Forensic Audit
What is a fraud
Profile of a fraudster
Tools available in excel
Theorems
A PROBLEM
A large retail chain doing substantially
well
had
Dismal diaper sale ; Excellent Beer
sale
SOLUTION
Place them together !
WHICH IS SUSPICIOUS ?
User 1: Login Click on Product #8473
Click on Product #157 Click on Product
#102 Complete Purchase
Data Mining
Computer
Expertise
Data
Informatio
n
IDENTIFYING SUSPICIOUS
TRANSACTIONS
Computer
Behavioral
Mouse Dynamics
Typing Speed
Previous Navigation
Habits
Entry & Exit points
on website
Smartphone
Analytics
Screen Pressure
Angle of usage of
phone
Movement across
screen
Heart Rate
nearest
method
neighbour
DATA MINING
V.
REGULAR AUDIT
Labor Verification
Regular Audit
1. Contracted rate =
Billing rate
2.
The billing is
relevant
to
the
audit period.
3. Statutory
Compliances
Data Mining
1.Contracted rate = Billing rate
2. Employee Pay grade wise
payment
3. Mapping resignation to Last
Pay
4. Mapping computer / biometric
logins
after resignation /
termination
5. Overtime Analysis to
determine
Completeness
and
Generalis Specialis
ed
ed
Batch Processing
No
Yes
No
Yes
Yes
No
No
Yes
Automated
No
Yes
Capable of learning
No
Yes
Lower
Higher
Cost
of
data
in
desired
Purchases
PURCHASES
Round number transactions
Duplicate transactions
Same, Same, Different Test
Above average payments
Transactions exceeding PO quantity
Sequential Invoice numbers
Too many invoices beginning with 9
FORENSIC AUDIT
FRAUD DETECTION
Name
Number of
Cases
PNB
123
CBI
174
SBI
474
Syndicate
114
OBC
86
BOB
--IDBI
--UCO
--United Bank
--TOTAL
Amount
2036,00,00,000
1736,00,00,000
1327,00,00,000
749,00,00,000
719,00,00,000
597,00,00,000
507,00,00,000
424,00,00,000
376,00,00,000
7542,00,00,000
WHAT IS FRAUD ?
Afalserepresentationofamatteroffact
whetherbywordsorbyconduct,
byfalseormisleadingallegations,or
By
concealmentofwhatshouldhave
disclosed
been
thatdeceivesandisintendedtodeceiveanother
FRAUD TRIANGLE
FORENSIC VIS--VIS
STATUTORY
Forensic
Statutory
Very focused and micro approach Macro approach with wide
coverage
Examines Reliability of
Relies on Documentary
documentation
evidences
Not compulsory
Regulatory compliance
GHOST EMPLOYEES
FRAUDSTERS PROFILE
Flamboyant lifestyle
Very aggressive in his approach / targets
Over protectiveness of data / documents
Being the first one in and last one out
Unusual close association with vendor /
customers
FRAUDSTERS PROFILE
FRAUDSTERS PROFILE
FORENSIC AUDITOR
Criminology
Investigativ
e Auditing
Accounting
Law
Forensic
Accountant
Computer
Science
TRAITS OF A FORENSIC
AUDITOR
TEST OF ABSURDITY
SPECIAL MENTION
BENFORDS LAW
SPECIAL MENTION
BENFORDS LAW
EXCEL LIMITATIONS
Absence of Log
Not admissible in court
Involves slight complexity in applying
Data size limitation / Instability
Risk of Hidden data
THANK YOU !
By
Dhruv Seth
ds@sethspro.com | www.sethspro.com