Organisations generate, retain and analyse more information than ever before, yet key data indicating illegal or abusive schemes is often hidden in various forms and difficult to detect by traditional means.
With corporate crime detection in particular, the ability to reveal relationships, communications, locations and patterns can make the difference between allowing a scheme to continue or uncovering and stopping it.
Accru has developed a data analytics service over the last 12 months to assist businesses concerned with fraud-related risks. The service aims to provide a high quality data analysis service to determine the reliability and integrity of information systems. Advanced data analysis tools are used to perform sophisticated queries, calculations and exception reports on a host of data – commonly referred to as data mining. As an example, a whole payroll data system can be analysed for operational data analysis and identification of control breakdowns, and irregularities such as duplicate bank accounts or tax file numbers.
Two common risk areas for business are payroll and accounts payable.
Payroll fraud is one of the most common types of fraud committed, costing billions of dollars to businesses every year. In a study published by the Association of Certified Fraud Examiners it was found that the median loss from 1,388 cases of fraud was $140,000 and in 20% of cases the loss was at least $1 million. Half of these organisations do not recover their losses.
Standard anomalies in any payroll system can include:
- Duplicate employee details
- Duplicate bank accounts
- Employees with no tax file number
- Employees with the same bank account (or other) details as suppliers
- Employees who worked more than the standard hours
- Employee pay rates not matching their award rate or equivalent; and
- Employees with excessive overtime or payment of allowances
Another study by the Association of Certified Fraud Examiners found that asset misappropriation was the most common risk of fraud/theft, having occurred in 85% of all cases. Of this, billing and expense reimbursement schemes were found to be the most frequent. The smallest organisations in the study suffered the largest losses.
Creating fictitious suppliers or invoices, duplicating payments and credit card fraud are all ways of processing fraudulent transactions within accounts payable.
Standard anomalies in any accounts payable function can include:
- Duplicate supplier details
- Duplicate bank accounts
- Duplicate payments
- Suppliers with invalid or no ABN
- Suppliers with same bank account (or other details) as employees
- Suppliers paid in unusual patterns
- Purchase orders in excess of their authorisation levels
- Unauthorised or duplicate credit card purchases; and
- Incorrect GST treatment on supplier invoices
Any irregularities for either system can be reported to management for further investigation. Directors can then be satisfied that the entire organisation’s payroll or supplier data has been independently checked for signs of fraud and irregularity. This testing can also can also be extended and adapted to other areas of the organisation, such as GST/VAT, inventory and revenue.
Read more about Accru’s data analytics service and contact one of our data analytics experts for a confidential discussion.