ACL recently released an article highlighting the top fraud risks for 2014, including:
- Fraud designed to mask bribery
- Inflated performance in the financial services sector
- Asset & revenue deception within financial statements
Fraud Designed to Mask Bribery
The Foreign Corrupt Practices Act (FCPA) is not the only bribery-related regulation companies must worry about. Other countries recently have created regulations related to bribery and corruption, many of which are more restrictive than the FCPA. Identifying potential conflicts of interest, improper payments and unusual payment trends and monitoring sensitive accounts are just a few of the ways analytics can help you increase your program’s effectiveness and efficiency.
Inflated Performance in the Financial Services Sector
The overwhelming volume of data generated in the financial services sector can benefit organizations looking to implement data analytics. One often-overlooked data set in the industry is account maintenance file data. While reports show account information at a point in time, these files show account information over time. For example, analysis of a loan maintenance file can identify many unusual activities, including past-due principal write-off, manipulation of maturity dates and manipulation of interest rates.
Asset & Revenue Deception Within Financial Statements
Analysis of general ledger transaction details is one of the most effective ways to identify potential financial statement fraud schemes. Manipulating financial statements generally involves entries made in the general ledger and posted to accounts. Analytics that evaluate 100 percent of transactions are the most effective way to identify potentially improper transactions. Keyword searches, analysis of entry dates/times and unusual entries to revenue accounts are just some of the tools used in such an analysis.
As we continue through 2014, keeping these risks top of mind will be important for organizations looking to mitigate fraud risk.