1. "Fraud Detection and Prevention Techniques Using Excel" May 8, 2013 Special Guest Panelist: Charlie WalkerReinvent Data LimitedCopyright 2013 FraudResourceNet LLCAbout Peter Goldmann, MSc., CFE President and Founder of WhiteCollar Crime 101 Publisher of White-Collar Crime Fighter Developer of FraudAware anti-fraudtraining courses Monthly columnist, The Fraud Examiner, ACFE Newsletter Member of Editorial AdvisoryBoard, ACFE Author of Fraud in the Markets, published by Wiley; available at Amazon.com)Copyright 2013 FraudResourceNet LLC

2. About Jim Kaplan, CIA, CFE President and Founder of AuditNet, the global resource for auditors Auditor, Author, Web Site Guru, Internet for Auditors Pioneer Recipient of the IIAs 2007 Bradford Cadmus Memorial Award.Copyright 2013 FraudResourceNet LLCCharlie Walker Managing Director atReinvent Data Limited Chartered Accountant andExcel expert Creator of TopCAATs, anExcel based CAATs package Author of The UltimateGuide to Auditing with ExcelCopyright 2013 FraudResourceNet LLC 3. Webinar Housekeeping This webinar and its material are the property of FraudResouceNet LLC. Unauthorized usage or recording of this webinar or any of its material is strictly forbidden. We will be recording the webinar and you will be provided access to that recording within five business days after the webinar. Downloading or otherwise duplicating the webinar recording is expressly prohibited. Please complete the evaluation to help us continuously improve our Webinars. Unless you are part of a group viewing this webinar on a single screen, you must answer ALL the polling questions to qualify for CPE per NASBA. Submit questions via the chat box on your screen and we will answer them either during or at the conclusion. If GTW stops working you may need to close and restart. You can always dial in and listen and follow along with the handout.Copyright 2013 FraudResourceNet LLCDisclaimers The views expressed by the presenters do not necessarily represent the views, positions, or opinions of FraudResourceNet LLC (FRN) or the presenters respective organizations. These materials, and the oral presentation accompanying them, are for educational purposes only and do not constitute accounting or legal advice or create an accountant-client relationship. While FRN makes every effort to ensure information is accurate and complete, FRN makes no representations, guarantees, or warranties as to the accuracy or completeness of the information provided via this presentation. FRN specifically disclaims all liability for any claims or damages that may result from the information contained in this presentation, including any websites maintained by third parties and linked to the FRN website Any mention of commercial products is for information only; it does not imply recommendation or endorsement by FraudResourceNet LLC Copyright 2013 FraudResourceNet LLC5 4. Todays Agenda Introduction Fraud Statistics Auditors Role in Fraud Detection Principles of Data Analytics Why Excel Getting Started (including 30 tests to try out) Going Forward Questions & Answers Copyright 2013 FraudResourceNet LLCFraud: The Big Picture According to major accounting firms, professional fraud examiners and law enforcement: Fraud costs the world $3.5 TRILLION per year. (5%) (ACFE) Business losses due to fraud increased 20% in last 12 months, from $1.4 million to $1.7 million per billion dollars of sales. (Kroll 2010/2011 Global Fraud Report) 75% of the companies surveyed experienced at least one incident of fraud in the last 12 months (KPMG) Average cost for each incident of fraud is $160K (ACFE) Skimming is 4th most common internal fraud; $60K per incident Larceny is 5th most common internal fraud; $100K per incident Approximately 60% of corporate fraud committed by insiders (PwC) Copyright 2013 FraudResourceNet LLC 5. The Auditors RoleIPPF Standard 1210.A3 Internal auditors must have sufficient knowledge ofavailable technology based audit techniques to perform their assigned workCopyright 2013 FraudResourceNet LLCIIA Guidance GTAG 13 Internal auditors require appropriate skills and should use available technological tools to help them maintain a successful fraud management program that covers prevention, detection, and investigation. As such, all audit professionals not just IT audit specialists are expected to be increasingly proficient in areas such as data analysis and the use of technology to help them meet the demands of the job.Copyright 2013 FraudResourceNet LLC 6. Professional GuidanceCopyright 2013 FraudResourceNet LLCPrinciples of Data Analytics to Detect Fraud Using set rules to identify transactions of higher risk Every company is different, has a different environment, different systems, different risks, etc. Need to use judgment to select testing Need to use judgment to evaluate results Just because a transaction matches a red flag doesnt mean fraud is present Using data analytics does not guarantee finding fraud or finding all fraud! Copyright 2013 FraudResourceNet LLC 7. Why Excel Youve already got it installed Youre already using it on a daily basis Its easy to get started with the basics Theres a huge amount you can do as your skills develop Skills learned here can be carried forward Copyright 2013 FraudResourceNet LLCPolling Question 1Copyright 2013 FraudResourceNet LLC 8. Limitations of Excel Requires manual formula entry Often many steps involved Restricted file sizes Not really designed for this type of workCopyright 2013 FraudResourceNet LLCKey Excel Features AutoFilters Pivot Tables IF Formulas VLookUpCopyright 2013 FraudResourceNet LLC 9. Getting Started Start with the easy stuff no point trying to run before you can walk! Have a well thought out plan Invest time in getting the right data in the right format Remember to save regularly Just do it whats the worst that can happen?Copyright 2013 FraudResourceNet LLCPolling Question 2Copyright 2013 FraudResourceNet LLC 10. The Data Analytics CyclePlan your testingRequest DataReviewContinual Learning Evaluate and Follow upObtain and Clean DataCarry out testingCopyright 2013 FraudResourceNet LLCGetting the data Speak to IT departments not just process owners Flat files (e.g. .csv) are best Be specific the more information you can provide the betterCopyright 2013 FraudResourceNet LLC 11. Accounts Payable Testing Duplicate Vendors Vendor Employee Relationships Split transactions Transactions posted on unusual days/dates/times Invoice date before purchase order date Rounded transactions Potential Related Parties Reversing changes to standing data Benfords Testing Summarize transactions by user Copyright 2013 FraudResourceNet LLCPolling Question 3Copyright 2013 FraudResourceNet LLC 12. PCards and TCards Transactions at foreign merchants Split transactions Purchases on weekends/holidays Multiple cards per cardholder Inappropriate vendor transactions Top Cost Centers/Card Holders Monthly limit exceeded Duplicate Claims Transactions just below authorization limits Round AmountsCopyright 2013 FraudResourceNet LLCPayroll Testing Duplicate or ghost employees Duplicate payments Excessive payments Employees paid after termination Unauthorized overtime Leave never taken Non Consecutive leave Only person working overtime Still in work not claiming overtime Cancelled and re-issued checksCopyright 2013 FraudResourceNet LLC 13. Polling Question 4Copyright 2013 FraudResourceNet LLCGoing Forward Build up a regular Test set Dont be afraid to experiment Share ideas Internally resource library, regular meetings Externally forums, webinars, LinkedIn Upgrade from Excel to dedicated CAATs software many of your skills will be transferableCopyright 2013 FraudResourceNet LLC 14. TopCAATs Suite of over 130 tools for Auditors and Accountants Runs completely within Excel Mixture of data analytics and Excel productivity tools Allows wider variety of work/testing and greatly improves efficiencyCopyright 2013 FraudResourceNet LLCPolling Question 5Copyright 2013 FraudResourceNet LLC 15. 10 Excel Resources for Auditors 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.Auditing with Excel book www.auditingwithexcel.com/auditnet Evaluating CAATs report www.topcaats.com/auditnet TopCAATs www.topcaats.com ActiveData for Excel http://www.mrexcel.com/auditors.shtml Using Excel as an Audit Software available eBook from AuditNet Using Excel to Detect Fraud (e-book). Excel for Auditors by Bill Jelen Fraud Detection with ActiveData For Excel Using Excel to Ferret Out Fraud Find Financial Fraud Using Benfords LawCopyright 2013 FraudResourceNet LLCQuestions? Any Questions? Dont be Shy!Copyright 2013 FraudResourceNet LLC 16. AuditNet Survey 2013 Fraud Detection Techniques Using Technology Please help us by taking the surveyScan the QR Code with your Mobile Device Or Visit https://www.surveymonkey.com/s/Z6XZ8DW Copyright 2013 FraudResourceNet LLCComing Soon Fraudulent Documentation: Fraudsters Secret Weapon ... How to Disarm Them, May 29 An Experts Advice on Establishing an Organization Wide Fraud Policy, June 5Copyright 2013 FraudResourceNet LLC 17. Thank You! Website: http://www.fraudresourcenet.com Jim Kaplan FraudResourceNet 800-385-1625 jkaplan@fraudresourcenet.com Peter Goldmann FraudResourceNet 800-440-2261 pgoldmann@fraudresourcenet.com Charlie Walker, ACA Reinvent Data Limited www.reinventdata.com Charlie.walker@reinventdata.com Copyright 2013 FraudResourceNet LLC