MIS5208 Spring 2018

DATA ANALYTICS FOR IT AUDITORS AND CYBERSECURITY

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Mahugnon B. Sohou

Week 3 blog post: Understanding data to find fraud

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Today auditors and investigators can read multiple types of data thanks to audit software. The CAATTs computer-assisted audit tools and techniques outlines the firsts steps needed to ensure that the auditor understands how the data can be used to address specific audit objectives. The first step in finding the information needed for fraud detection is to identify the goals of the investigation. Then audit management needs to find the skills and technical capabilities required to proceed with the investigation.

The continuous improvement of auditing software gives auditors and investigators better tools to better interpret the data. There is a a variety of analysis techniques that can be used to understand the data and also to find fraud. This also encourages auditors to think about potentially new auditing applications to use in their operational environment.

 

Week 2 blog post: The Use of Data analysis in Fraud detection

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In today’s business environment, productivity increase is required from every part of the company. Fortunately the needs for an increased efficiency can be solved with data analysis. As IT is constantly growing, there will be more and more Computer aided fraud.

However modern software and computer assisted tools help auditors do their job better by focusing on areas that pause the greatest threats. Computer-aided tools however are not only used by auditors or fraud investigators. One great advantage of using audit software is being able to develop custom best practices for the audit of various business processes. Chapter 3 of David Coderre’s Computer-aided fraud shows how we can use computer-assisted techniques to detect fraud.

Understanding fraud and its prevention

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Studies have shows that the slightest change in the fraud triangle is the one thing that makes a difference between honest to dishonest behavior. When there is a perceived opportunity to get an unearned benefit there can be Fraud. The Fraudster is then tries to rationalize the behavior as acceptable. Ethics and fraud awareness training is the most effective way to prevent the fraud from happening. This shows all employees that the company takes Fraud really seriously, and how they should handle a case of fraud.

Internal controls has an important role in detecting Fraud. The preconditions for detecting frauds apply not only to auditors but to fraud investigators as well. A general knowledge of controls is still required for fraud investigators even though they only intervene when there is a case of known fraud. It is important to determine who can take advantage of control weaknesses opportunity. Audit managers know that it is equally important to make sure that management keeps a strong Fraud policy as it is to have strong control systems.