Auditors and accountants are increasingly leveraging data analytics to look for fraudulent activities in accounting. Data Analytics allows them to look at the financial data from different angles. As a result of this they can arrive at the root cause of fraudulent activities especially in Accounting. This is why most of the accountants are using data analytics for fraud detection and control.
Trend and pattern analysis, behavioral analysis and monitoring of spending trends are some of the ways used to look for indications of fraud in terms of diversion of funds or theft. Data Analytics is almost becoming an alternate to internal control systems. Most of the internal systems have failed to detect and report potential fraud. In case of social insurance and all, when numbers are entered incorrectly, it may be pointing to some possible act of fraud with respect to personal identity or payroll. Data analytics can look for such trends and patterns, which potentially indicates fraudulent activity or possibility of fraud. Data analytics tools can review electronic time entry records in real-time to ensure compliance with existing policies, procedures and labor regulations.
Usage of data analytics for fraud detection will help to bring the basic techniques to uncover fraud through data analysis. Software independent technique is a comprehensive technique. It provides numerous data analytics tests which will detect various fraud schemes. It also helps to interpret to identify the red flags of fraud. It helps to ensure to recognize the types of data and available tools that can be used to look for signs of fraud. Controllers and corporate managers, Forensic and management accountants, accounts payable and financial analysts can make the best of such data analytics tools.