Forensic accountants have long used technological tools to uncover fraud schemes. But recent advances in “big data” have provided even better, more efficient techniques for identifying suspicious activities and dishonest employees. These are three common ways fraud experts use data analytics: 1. Association analysis This method can help identify suspicious relationships by quantifying the odds of a combination of data points occurring together. In other words, it calculates the likelihood that if one data point occurs, another will, too. If data point combination occurs at an atypical rate, a red flag goes up. For example, association analysis might find that a certain worker or manager tends to be on duty when inventory theft occurs. 2. Outlier analysis Outliers are data points outside the norm for a given data set. In...
