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Fraud Analytics: Strategies and Methods for Detection and Prevention by Delena D. Spann

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The Evolution of Fraud Analytics

FRAUD ANALYTICS is an effective approach in the fight against fraud; it is indispensable in discovering patterns and aligning trends. It is capable of identifying masses of red flags in financial transactions that indicate fraud has occurred or has the potential risk of occurring. Fraud analytics can be used anywhere. It is well suited to effectively analyze volumes of information within the private, public, or government sectors.

Fraud analytics is rapidly emerging in the fight against white-collar crime; many professionals are using it as an extremely effective means of fraud detection. The technology aspect of fraud analytics is greater than most expect. It allows fraud examiners, analysts, CPAs, auditors, and investigators to analyze data (big or small) without altering the data manner. Fraud analytics has superseded the age-old method of plodding through mountains of paperwork or hit-or-miss statistical sampling.

What is fraud? Fraud encompasses a wide range of illicit practices and illegal acts involving intentional deception or misrepresentation. The Institute of Internal Auditors (IIA) defines fraud as:

any illegal act characterized by deceit, concealment, or violation of trust. These acts are not dependent upon the threat of violence or physical force. Frauds are perpetrated by parties and organizations to obtain money, property, or services; ...

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