Benford analysis it is a very useful tool for analyzing a large population of numbers / accounts / results to identify outliers which will likely require additional work.The Benford analysis for first digit and second digit will mainly identify major outliers which would have to be reviewed for the business justification, if any. For example, ff the first digit of 8 and the second digit of 5 were above the expected values, a reasonable explanation may be that the organization manufactures a product which contains an component that is purchased frequently for $850. Or maybe there isn’t a good reason and further testing, sampling, review will need to be performed. PivotTables of the outlier number results by vendor may be a likely next step.The Benford analysis for the first two digits can be used to identify avoidance of thresholds. This could be indicative of individuals avoiding obtaining additional approval for PO or invoice amounts of $10,000 or $100,000 and up. The same analysis can be run on purchase order data to see if PO’s are being split to avoid approval thresholds.The Benford analysis for the first three digits can be used to find “conspicuous round off operations”. If the 100 or 500 have extreme outliers, you may want to check to see why there are so many $500 or $1,000 invoices. This could be the result of fraudulent invoices or they may be a business justification (like the organization processes rebates through AP and the rebate is $500 or $1,000).Benford’s analysis probably won’t pinpoint fraud but it is a good way to start looking at a large amount of data. I think it is a good starting point for offering additional fraud detection services.
Benford analysis it is a very useful tool for analyzing a large population of numbers / accounts / results to identify outliers which will likely require additional work.The Benford analysis for first digit and second digit will mainly identify major outliers which would have to be reviewed for the business justification, if any. For example, ff the first digit of 8 and the second digit of 5 were above the expected values, a reasonable explanation may be that the organization manufactures a product which contains an component that is purchased frequently for $850. Or maybe there isn’t a good reason and further testing, sampling, review will need to be performed. PivotTables of the outlier number results by vendor may be a likely next step.The Benford analysis for the first two digits can be used to identify avoidance of thresholds. This could be indicative of individuals avoiding obtaining additional approval for PO or invoice amounts of $10,000 or $100,000 and up. The same analysis can be run on purchase order data to see if PO’s are being split to avoid approval thresholds.The Benford analysis for the first three digits can be used to find “conspicuous round off operations”. If the 100 or 500 have extreme outliers, you may want to check to see why there are so many $500 or $1,000 invoices. This could be the result of fraudulent invoices or they may be a business justification (like the organization processes rebates through AP and the rebate is $500 or $1,000).I guess in summary, Benford’s analysis probably won’t pinpoint fraud but it is a good way to start looking at a large amount of data. I think it is a good starting point for offering additional fraud detection services.
Topics coveredMissing ChecksConditional formatting and data filtersEmpty Data fieldsDuplicatesComparing two Excel filesPayee not on vendor listVendor also an employeePivot TablesHigh-dollar vendorsPowerPivotReportingGroupingHeaders/FootersCopying Tabs (worksheets)Removing Meta-dataSecure spreadsheets for E-mailing
Topics coveredMissing ChecksConditional formatting and data filtersEmpty Data fieldsDuplicatesComparing two Excel filesPayee not on vendor listVendor also an employeePivot TablesHigh-dollar vendorsPowerPivotReportingGroupingHeaders/FootersCopying Tabs (worksheets)Removing Meta-dataSecure spreadsheets for E-mailing
Topics coveredMissing ChecksConditional formatting and data filtersEmpty Data fieldsDuplicatesComparing two Excel filesPayee not on vendor listVendor also an employeePivot TablesHigh-dollar vendorsPowerPivotReportingGroupingHeaders/FootersCopying Tabs (worksheets)Removing Meta-dataSecure spreadsheets for E-mailing
Topics coveredMissing ChecksConditional formatting and data filtersEmpty Data fieldsDuplicatesComparing two Excel filesPayee not on vendor listVendor also an employeePivot TablesHigh-dollar vendorsPowerPivotReportingGroupingHeaders/FootersCopying Tabs (worksheets)Removing Meta-dataSecure spreadsheets for E-mailing
Topics coveredMissing ChecksConditional formatting and data filtersEmpty Data fieldsDuplicatesComparing two Excel filesPayee not on vendor listVendor also an employeePivot TablesHigh-dollar vendorsPowerPivotReportingGroupingHeaders/FootersCopying Tabs (worksheets)Removing Meta-dataSecure spreadsheets for E-mailing
Topics coveredMissing ChecksConditional formatting and data filtersEmpty Data fieldsDuplicatesComparing two Excel filesPayee not on vendor listVendor also an employeePivot TablesHigh-dollar vendorsPowerPivotReportingGroupingHeaders/FootersCopying Tabs (worksheets)Removing Meta-dataSecure spreadsheets for E-mailing