Forensic Accounting
Forensic accountants are commonly involved in these three areas: fraud, disputes, and this legal setting.
What is court (or legal proceedings)?
This type of analytics answers the question “What happened?” by summarizing historical financial data and trends.
What is descriptive analytics?
This type of analytics answers the question “What will happen?” and is used in audit analytics to forecast potential risk areas and predict anomalies.
Predictive analytics
These three tools form the core foundation for data extraction, cleaning, and analysis in audit and accounting analytics.
Excel, SQL, and Power BI
Repeated small payments made to avoid approval thresholds are an example of this fraud tactic.
What is invoice splitting (or split-payment fraud)?
Using AI to scan all transactions instead of a small sample helps accountants reduce this major risk.
What is the risk of missing fraud or errors?
Traditional audits rely on samples, but analytics allows auditors to test this instead, reducing the risk of missing fraud hidden in small subsets.
You see a spike in travel expenses just before quarter-end, this tool helps you visualize and explain this anomaly to stakeholders.
Power BI or Tableau
Linking vendors, employees, and bank accounts to uncover hidden relationships is known as this type of forensic analysis.
What is link analysis (or relationship analysis)?
Dashboards and visual reports in tools like Power BI or Tableau are mainly used to track these measurable performance indicators.
What are KPIs (Key Performance Indicators)?
An auditor notices repeated round-dollar payments, duplicate invoices, and unusual transaction timing patterns. Analytics would help to classify these findings as ___.
Anomalies or red flags
This Excel function allows an auditor to count how many times a value appears in a dataset, helping identify potential duplicate payments.
COUNTIF
This specialized forensic software is commonly used to clean data, run tests, and detect anomalies in large accounting datasets.
What is Caseware IDEA?
This benefit of AI allows accounting teams to detect issues early and shift from reactive investigations to proactive prevention.
What is continuous monitoring?
Queries/rules create a clear ____, making evidence clear and effective.
Audit trail
According to the presentation, this emerging technology will allow auditors to proactively predict fraud rather than relying on periodic audits.
AI and machine learning
The future of forensic accounting increasingly requires professionals who combine accounting knowledge with strong data and technology skills
What are tech-fluent accountants (or a tech-focused skillset)?
Prescriptive analytics goes beyond predicting outcomes by recommending this next step for decision-makers.
What is what action to take (or what decision to make)?
Rather than just investigation, this is the real long-term value of audit analytics.
Fraud prevention through continuous monitoring/ Shifting from reacting after losses to stopping issues before they occur.
This Excel feature adjusts a single input variable to achieve a specified output, making it useful for sensitivity analysis in audit models.
Goal seek