Question

Computer Forensics: Prevention and Detection

Companies use various types of computer software embedded in their accounting systems to prevent and detect fraud. Research one such program and explain in your own words how it prevents or detects fraud.

Software programs are also used in fraud investigations. These programs include case management software, graphics software, and data extraction software. Give an example of how case management software assists a fraud investigation. Next, provide an example of how graphics software can be used in a fraud case. Third, give an example of a type of evidence that can be obtained through a data extraction program.

Answer 1

Let’s take an example of a Payroll Software

There are ways which can create fraud in payroll system like Reactivated Employees, Ghost Employees, Recording of Hours Worked, Expenses Exploitation

These are following ways that your Payroll system can help prevent and detect fraud as well as maintain your compliance.

Security Access Controls: The first line of defense is access control in order to assure Confidentiality, Integrity & Reliability of data, Availability of the data when needed

Pop-ups and alerts: When a new employee is added, your system can let you know if there are duplicate social security numbers. When an employment status is changed, or an employee is reactivated – for a last or additional payment such as incentive or vacation payout – upon reactivation of the employee, your system can send alerts to notify you of the change

Reporting: our system’s reporting can help recognize when there are: Ghost Employees or Reactivated Employees, items like Overtime hours, in general or overtime above a certain threshold.

Approval steps: During an electronic new employee hire process, your system will likely have steps for when:

New employee enters info; Signs-off on documents; and, the hiring manager approves the information.

Electronic Time Collection, Change Logs & Audit Reports – for entry, changes, and approval stages

Management software in fraud investigation:

Real-time fraud prevention and detection uses automated analytics to identify suspicious behavior based on metrics that include location, transaction frequency and transaction size. By keeping the “black list” of behaviors and metrics in-memory rather than leaving the system to query the database for every transaction, our fraud management solutions enable organizations to quickly correlate massive amounts of transactional data against customer behavior, spotting and stopping more fraud and saving companies millions of dollars each year.

Graphic software in fraud case

For eg, process flow charts helps to identify slice the events that occurred in logical steps like what happened, how it should have worked compared to how it did, it simplifies complex processes into logical steps

Data extraction program for evidence of fraud:

Cancelled and returned checks do occur in the course of a normal Accounts Payable month. What is more uncommon is a vendor with many cancelled checks or a regular pattern of cancelled checks. Cancelled checks are usually legitimate transactions; however, a cancelled check can be returned to the wrong hands and re-written to the fraudster

This algorithm is easy to implement. Calculate the number of cancelled or returned checks for each vendor and divide by the total number of checks for that vendor. Then, sort this list by descending percent so that your most suspicious vendors are at the top of the report