Forensic Data Analytics
An experienced data analyst brings order to chaos and simplicity to complexity.
Technology has changed nearly every aspect of the business, including the type of fraud organisations face.
Detecting and investigating fraud is more complex than ever before, and getting it wrong can cost a company millions of dollars, its customers and its reputation.
Where larger datasets play a pivotal role in an investigation, forensic data analytics provides essential insights into suspicious patterns, event chronology and a raft of otherwise unseen anomalies. The skills and experience of our forensic data analytics specialists are as important as the advanced tools and techniques at our disposal.
BDO's Forensic Data Analytics specialists can assist your organisation across a range of scenarios.
Anti-money laundering (AML) activities
The value of worn book pages from 1881
BDO’s Forensic specialists found Benford’s law analysis to be particularly helpful in the detection of certain anti-money laundering (AML) activities.
This law dictates that the highest number of transfers start with the number one, the second highest two and this trend continues with the smallest number of transactions typically starting with nine.
Using Benford’s law for our financial services sector client, we uncovered an AML offence known as structuring, which occurs when a depositor of money deposits multiple instances of amounts just under $10,000.
Modern fraud risk management
BDO’s Forensic Data Analytics specialists assisted a client in seeking comfort in their organisation’s systems, in response to potential fraud concerns.
To do this, we analysed data from the client’s purchasing, payroll, and expense systems, in addition to vendor and employee master files.
We were able to prepare a dashboard visualising the outgoings over a certain period, highlighting high risk areas in the client’s data, which posed the opportunity for fraud to occur. This included identifying potential conflicts of interest, deficiencies in internal controls, and various recommendations to reduce the risk of fraud occurring in the future.
Proactive data analytics in due diligence process
BDO was contacted to assist a client in the purchase of a medical practice worth $2.8 million. Although the client was interested in the practice, suspicions were raised over a spike in revenue in the year leading up to the sale. Given these concerns, our specialists extended the due diligence process by leveraging data analytics to investigate sales at a transactional level.
This process identified hundreds of fictitious sales linked to Medicare fraud, which were artificially boosting net profits.
Examples of red flags in this case included the claiming of rebates twice on the same procedure (by ‘double dipping’ into Medicare and private health) and processing $2 million of sales through a miscellaneous code. This was considered highly unusual by medical experts given the comprehensive list of medical codes.
Reviewing a large quantity of records
Need to review 3,000 bank statements in a short space of time? No worries.
BDO was engaged to reconstruct accounting records covering 20 years. The client provided more than 3,000 PDF bank statements relating to multiple bank accounts.
The BDO team quickly and efficiently converted the bank statements to text within excel with 100% accuracy. The conversion included a reference to the bank statement, ensuring each data line was unpinned by supporting documentation. The forensic data analytics team then processed the newly converted data files and classified the deposits and withdrawals.
Within a short space of time, over 3,000 bank statements were analysed, and key evidence obtained.
Audit logs to the rescue
A bookkeeper paid an invoice to the wrong bank account after an unknown attacker changed the bank account details on a client’s invoice. The client believed the compromise occurred with the bookkeeper’s Information Technology (IT) equipment and blamed them for the significant loss.
BDO’s Forensic team assisted by collecting Microsoft Office 365 audit logs from both accounts of the bookkeeper and client, and using data analytics. Our team quickly identified logins from internet protocol addresses located in Nigeria. These addresses were used to log in via Outlook Web Access to the client’s email, creating the fraudulent emails addressed to the bookkeeper instructing them to pay the altered invoice.
Our data analytics capability enabled us to assist the bookkeeper by restoring the clients trust in their services. The results of our log analysis and subsequent forensic report also allowed the bookkeeper to make a claim and recover the lost money for the client under the social engineering fraud clauses in her Professional Indemnity Insurance policy.
Digitally facilitated regulatory investigations
For a Financial Services Compliance investigation into Transaction Monitoring lapses at a large international bank, BDO professionals assisted by providing the investigation team (a combination of client and other professional services firms) with a technical backbone to support the investigation.
Details for bucketed Transaction Monitoring errors were loaded to our forensic systems from various relevant sources and investigated in one effort to ensure equality in the process.
Supporting workflows ensured the analyst was able to perform their analyses and report back their findings, while full audit trails were maintained ensuring the process was repeatable.
Responsible senior officers were able to monitor the status through our tailor-made reports.
Our data analytics knowledge and experience
BDO’s Forensic Data Analytics specialists employ extensive industry knowledge and experience, coupled with advanced analytics and forensic applications of artificial intelligence (AI) and visualisation tools, to quickly and defensibly answer our client's questions.
Our services include:
- Data analytics to detect outliers and the red flags of fraud
- Fraud investigations
- Data visualisation
- Dashboard assistance and support
- Tracing of funds and assets
- Statistical modelling
- Enhanced eDiscovery.