Jeremy Clopton, CFE, CPA, ACDA
Senior Managing Consultant, Forensic and Valuation Services
We have more data available to us as fraud examiners today than we ever have before. However, we have less data today than we will likely have in the future. These new data sets are new opportunities for us, but also present new challenges. What data sets do you have that you need to leverage for your next fraud examination?
I am a big fan of podcasts, especially those that really grab my attention. Two recent podcast episodes, When Your Conspiracy Theory is True from Note to Self and Eye in the Sky from Radiolab, focused on the use of surveillance in crime prevention and detection. While fascinating, these podcasts didn’t directly relate to the world of fraud prevention and detection. But I found that the same principles can still be applied because of the focus on the use of non-traditional data sets — in this case, location-based — and visualizing them in an fraud examination.
Application in Examinations
Much of the data fraud examiners focus on is in the traditional accounting system, and the data that doesn’t come from the accounting system is still likely financial in nature. As I have mentioned in previous posts, to effectively leverage an organization’s data we need to think outside the financial data. Beyond the financial information, we have great amounts of data at our disposal about our companies and related activities. Take, for instance, data regarding access: access to buildings, computers, networks, phones, access to anything that tracks the user. This information can be used to essentially track an employee throughout your organization during the day, using such details as:
- Time of first email access
- Time when the person entered the parking garage
- Time accessing the building
- Time logging on to the computer
- File access times
- Breaks during the day based on computer activity
- Print times for individual documents
- Time logging off the computer
- Time leaving the building
- Time leaving the parking garage
- Re-entry of any location
- IP address if logged in off-site
While you may not have video or pictures tracking your employees, like the technology referenced in these podcasts, you do have individual data points that allow you to track your employees’ activities during the day so you can begin to create a picture of what their activities look like. Visualizing this information may be a benefit to you in your next fraud examination. If nothing else, it may help you narrow down the list of those you want to investigate further.