Where Will Data Analytics Take Us Next?

GUEST BLOGGER

Gerry Zack, ACFE Regent, CFE, CIA, CPA, CCEP
Zack, P.C.
Rockville, Md.

It seems like only yesterday that searching for dupes was considered to be sophisticated data mining! Oh, how the times have changed, and continue to change. Data analytics to detect fraud is an exciting field and one that is developing rapidly. (We even added an entire Data Analytics track at the upcoming 25th Annual ACFE Global Fraud Conference in San Antonio, Texas, June 15-20, 2014). According to a recent EY survey, 72 percent of executives surveyed believe big data can play a key role in fraud detection and prevention, but only 26 percent said their organization deploy forensic analytics, despite their interest in doing so. Those numbers show a big gap fraud fighters are hoping to close in the coming years. I am excited to have the opportunity to help close this gap by moderating a panel, “Where Will Data Analytics Take Us Next?” at the ACFE Global Fraud Conference. 

In addition to fielding questions from the audience, I hope to explore several issues with our panel of experts, such as:

• What are some recent data analytic developments that are particularly useful to fraud detection that many of us might not be aware of?
• What are some of the most helpful software solutions currently in development that we can expect to see available in the near future?
• What future data analysis capability are you most interested to see a solution developed to address?
• Big data doesn’t necessarily mean good or useful data. With so much potential data to mine and analyze, where should an organization begin the process of deciding what and where to mine without getting lost in forest of big data?
• What are the most common mistakes that are made when an organization first embarks on a data analytics strategy?
• How does one best address the issue of data ownership in an organization, such as when one department or group closely guards information they have developed?
• How do data analytics needs and applications for fraud investigators differ from those of people who mine for signs of red flags on a regular basis?

These are just a few areas I’d like to see covered, but I’m sure you will have many other great questions to pose to our panel. This promises to be a fast-paced and exciting session that will be a great culmination to the conference, providing you with that one final opportunity for valuable take-aways. I also encourage you to stop by the conference's first-ever Data Analytics Showcase to meet with some of the industry's leading data analytics software providers.

I look forward to seeing you in San Antonio. 

Knowing What Works: ACFE Asia-Pacific Conference Heads to Singapore

AUTHOR’S POST

Mandy Moody, CFE
ACFE Social Media Specialist

Almost half of the executives interviewed in Ernst & Young’s latest Asia-Pacific Fraud Survey Report said that their companies’ policies do not work. As stated in The Law Society’s Gazette in the article, “Fraud and corruption rife in Asia-Pacific,” 19 percent reported an increase in bribery and corruption, and 27 percent said managers take short cuts to meet targets. These numbers aren’t surprising, as I usually say, but they are loud reminders that companies must continue to implement what does work and look for ways to improve existing policies.

Fraud fighters from all over the Asia-Pacific region will gather in Singapore, Nov. 20-22 at the 2013 ACFE Asia-Pacific Fraud Conference to address these statistics, the latest trends and the ways top professionals are combating fraud.

Here are just a few of the keynotes that will be reporting on what does work for companies in the region:

Nagesh Pinge, Chief Internal Auditor, Tata Motors, India

In a career spanning 29 years, Pinge has worked with many organizations of repute such as ICICI Bank, Reliance Industries Ltd, Deutsche Bank of Germany and JSW Group. Pinge's major tenure has been with ICICI Bank for 14 years where he managed a team of 100+ internal auditors located worldwide.

John Geurts, Executive General Manager, Group Security & Group Property, Commonwealth Bank, Australia

Geurts has more than 13 years’ experience as a global security leader in the banking sector, combined with 19 years in law enforcement with the Australian Federal Police. In his current role at the Commonwealth Bank of Australia, Geurts leads Group Security in investigations, fraud control, financial crime and anti-money laundering shared services.

Jeffrey Robinson, Author, Lecturer and Journalist, U.S./UK

Robinson is the bestselling author of 27 books, and a popular speaker on the international after-dinner circuit. His money laundering tour de force, The Laundrymen (1993), was a headline-maker in 14 countries, establishing him as a recognized expert on organized crime, fraud and money laundering.

D. Bruce Dorris, J.D., CFE, CPA, CVA, VP and Program Director, ACFE, U.S.

Dorris is an advisory member of the ACFE Board of Regents. As an Assistant District Attorney for the Caddo Parish District Attorney’s Office in Shreveport, La., Dorris created and was the Director of its Financial Crimes Screening Section. He formerly served on the Board of Directors of the National White Collar Crime Center, and was the Vice Chairman of its Audit Committee.

Read more about the Conference at ACFE.com/AsiaPac, and register by Oct. 21 to get the early registration discount!

The New "Big Data" Toolbox

LIVE FROM THE ACFE GLOBAL FRAUD CONFERENCE

By Mandy Moody, CFE,
ACFE Social Media Specialist

The term “big data” has changed the way accountants, auditors and fraud examiners look at what used to be rows and rows of Excel spreadsheets, or — before that — what used to be pages and pages of handwritten company ledgers. When we say “big data,” we are not referring to data that is trendy or hot; there aren’t groups of data sets cruising around the web or in our email wearing skinny jeans and tight v-necks. The term “big” describes the vast amount of information lying in the structured and unstructured data every business produces. Gartner defines big data as “high-volume, -velocity, and -variety information assets that demand cost-effective, innovative forms of information processing for enhanced insight and decision making.

Vincent Walden, CFE, CPA, led a Pre-Conference Session today, “Taking Data Analytics to the Next Level,” with the goals of giving attendees the tools they need to capture, organize and filter data that could ultimately catch or stop a fraud. Walden is Senior Manager of Fraud Investigation and Dispute Services at Ernst & Young and specializes in text analytics, forensic data mining and electronic discovery services.

From internal surveys and research (structured data) to external emails and social media (unstructured data), there is a seemingly endless amount of information available for collection and analysis.

“With ever-mounting data and legislative requirements, companies are looking for ways to incorporate analytics to sift through the mountains of data collected during the normal course of business,” Walden said. “By incorporating forensic data analytics, investigators can query 100 percent of the data through a series of tests or filters.”

These tests and filters sift out relevant transactions and classify or rank the remaining transactions for further human review. The analytics are a combination of rules-based tests, text mining, data mining, clustering and visual analytics. But, how do you go about organizing what data you want and how you want to capture it?

Perhaps some of the best advice anti-fraud professionals could receive, Walden described the top ways to work with your company’s IT department to get the analytics you need:

• Design your analytics based on fraud risks
• Determine your required data sources (structured and unstructured)
• Prepare a data-request memo (specify table names, desired data output and time frame)

The last section of Walden’s session covered the optimal ways to implement “big data” initiatives. “Fraud investigation is not a linear process, especially when it comes to data analytics,” Walden said. “It is okay to start anywhere and go everywhere, so long as you have a defined scope and key objectives for the analysis.”

Walden advised attendees to remember to:

• Recall the Forensics Analytics Maturity Model.
• Leverage multiple data sources — both structured and unstructured.
• Identify links between structured and unstructured data and bring them together in a stronger platform.
• Use search-around functionality to analyze data from multiple aspects.
• Use geocoding and heat maps to identify high-risk regions.

Find more news and in-depth Conference coverage at FraudConferenceNews.com.

New E&Y Survey: 1 in 5 Employees in EMEIA Aware of Financial Manipulation in Last Year

AUTHOR’S POST

Mandy Moody, CFE
ACFE Social Media Specialist

Many surveys, numbers and stats make their way into my email every day, but a recent report left me speechless. Ernst & Young released the results of a fraud survey that found that one out of every five employees in EMEIA (Europe, Middle East, India and Africa) were aware of financial manipulation in their company in the last 12 months. Add to that, 57 percent believe bribery and corruption are widespread in their country.

For those of us in the anti-fraud profession these numbers may be shocking, but they aren’t surprising. We read and hear every hour about a new fraud perpetrated, caught or prevented. But, as the number of cases grow, so do the number of convictions, arrests and frauds thwarted.

Just as fraud isn’t isolated to a specific culture or country, neither is fraud prevention and detection. There is one aspect of the upcoming 24th Annual ACFE Global Fraud Conference that I am truly proud of. While it is being held in Las Vegas and many of the attendees are from North America, we also welcome anti-fraud professionals and speakers from more than 60 countries around the world.

For those of you coming to Las Vegas next month, here are a few events to look for if you are traveling from another country:

• The Opening Ceremony includes an impressive procession of flags for countries represented at this year's event. Each flag is carried by an attendee from that country.
• First-Ever International Attendee Reception: Held Sunday, June 23, 7- 9 p.m. in conjunction with the Welcome Reception, this inaugural reception gives you an exclusive opportunity to connect with other anti-fraud professionals from your region and beyond.
• Breakout sessions dedicated to addressing global fraud challenges.
• International Chapter Representative Meeting: Leaders from the international ACFE chapters are invited to a special gathering to exchange ideas on chapter development and growth, and review common goals shared by the ACFE.

Find more information and the full Conference Agenda at FraudConference.com.

Congratulations to the Newly-Elected ACFE Regents

ACFE Board of Regents Welcomes Two New Members

The ACFE is proud to announce that Johnnie R. Bejarano, DBA, CFE, CPA, and E. Wendell Hopewell, MBA, CFE, CPA, have been elected to the ACFE Board of Regents. Fellow CFEs elected them from a list of six candidates selected by the Board’s nomination committee. Bejarano and Hopewell will take office at the Board’s meeting this month at ACFE headquarters in Austin, Texas.

JOHNNIE R. BEJARANO, DBA, CFE, CPA, is a senior financial analyst and former accounting manager at National Renewable Energy Laboratory, the nation's primary research and development laboratory for renewable energy and energy efficiency. He's also an adjunct faculty member and area chair of accounting and finance at the Denver campus of the University of Phoenix School of Business. He's a combat military veteran with 26½ years of service in the U.S. Air Force and Colorado Air National Guard. Bejarano was deputy commander for support in the Sultanate of Oman during Operation Enduring Freedom, served as the base comptroller at Buckley Air Force Base, and was involved in inspector general investigations and reports of surveys as an assistant U.S. property fiscal officer. He retired as a lieutenant colonel.

E. WENDELL HOPEWELL, MBA, CFE, CPA, is managing director of Forensic Professionals LLC, a national fraud practice that has helped vindicate corporate executives of fraud allegations launched by audit reports and investigations. Hopewell's career began in the 1980s with Ernst & Whinney, a precursor to Ernst & Young. He was awarded the Ernst & Young Research Fellowship in conjunction with the Government Finance Officer Association of the United States and Canada. Previously, Hopewell led his own regional firm, Hopewell & Company; was director of litigation at BDO Seidman; and was director of litigation at American Express. He also held a federal bankruptcy trusteeship. Hopewell's knowledge and application of professional accounting, auditing, fraud examination, and ethical standards resulted in the nation's first civil finding of audit fraud against state auditors, Pacific West Marketing and Communications Firm Inc. v. California State Department of Transportation, which resulted in a $2 million verdict.

The Board of Regents is elected by CFEs. They are responsible for setting membership standards that promote professionalism and ensure the future of the organization as a whole. Elections are held annually to fill vacant positions and all regents serve two-year terms. Read more about the ACFE Board of Regents here.