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CS Professional · Internal and Forensic Audit · Emerging Issues and Challenges

An internal auditor at Deccan Retail Ltd finds that several vendor payments are just below the Rs 50,000 approval threshold, issued to different vendors sharing the same bank account and address. Which fraud-detection technique is most apt to follow up?

Data analytics that match vendor master attributes such as bank accounts and addresses and analyse payment patterns is most apt. Payments just under an approval limit to vendors sharing details suggest split billing or fictitious vendors, which full-population analytical testing can reveal.

  1. AData analytics matching vendor master attributes and payment patternsCorrect
  2. BIncreasing the number of board meetings
  3. CCirculating the code of conduct again
  4. DReviewing only the final audited financial statements

Explanation

Payments just under a limit and shared bank details point to split invoices and shell vendors. Data analytics matching bank accounts, addresses and amounts across the full population detects such patterns. Awareness measures and statement review do not test the transactions.

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