Tools to Detect Financial Fraud

Students from the Master in Forensic Accounting and Financial Criminology program who are currently taking the course on Money Laundering and Financial Criminology made their group presentations today. The students presented their selected tools which included among others: Financial Ratios (FR), Financial Statement Analysis (FSA), Beneish Model, Altman Z-Scores, Benford Model, Networth Analysis, Social Network Analysis (SNA), Neural Network Analysis (NNA), Document Analyzer and Data Mining Model. In their presentations, they had to demonstrate how each tool is being used in their financial fraud investigation cases. Some techniques such as FR and FSA are conventional analytical tools and they are still relevant and widely used today.
Meanwhile, tools such as Benford Model and Data Mining could be easily integrated with available spreadsheets like microsoft excel and access. The utilization of graphic interfaces to estimate frauds is widely used in tools such as Social Network Analysis, wavelet and Neural Network Analysis. For cases involving tax fraud, the networth analysis is still useful, as the "burden of proof" remains with the suspected fraudsters.