Preface

The business of occupational and financial statement fraud is unfortunately alive and doing very well. There are regular reports of financial statement fraud in the financial press, and all types of financial fraud in the press releases section of the SEC's website. There are also regular reports of occupational fraud in the financial press. These reports might just be the tip of the iceberg. The 2010 Report to the Nations on Occupational Fraud and Abuse of the Association of Certified Fraud Examiners estimates that the typical organization loses 5 percent of its annual revenue to fraud. These statistics are confirmed in other fraud surveys such as The Global Economic Crime Survey of PriceWaterhourseCoopers (2009) and in reports published by the U.S. Government Accountability Office. Together with the losses from employee fraud, there are also other corporate and public sector losses from accounting errors such as underbilling or overpaying or duplicate payments.

Forensic analytics describes the act of obtaining and analyzing electronic data using formulas and statistical techniques to reconstruct, detect, or otherwise support a claim of financial fraud. In this book, forensic analytics is also used to detect accounting errors such as underbilling or overpayments. Forensic analytics also includes the detection of biases that come about when people aim for specific numbers or number ranges to circumvent actual or perceived internal control thresholds. The use of forensic ...

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