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CS Professional · Internal and Forensic Audit · Fraud Detecting Techniques

In a proactive fraud-detection approach at Kaveri Foods Ltd, the forensic team applies data analytics across all purchase transactions without any specific allegation. How does this differ from a reactive approach?

A proactive approach searches for anomalies and red flags before any suspicion or allegation exists, using analytics across populations of transactions. A reactive approach starts only after an incident, complaint or loss has been identified, and focuses on investigating that specific matter.

  1. AIt searches for anomalies before any suspicion arises, whereas a reactive approach begins after an allegation or incidentCorrect
  2. BIt starts only after a whistle-blower complaint is received
  3. CIt is limited to interviewing the suspect
  4. DIt applies only after a court has convicted the person

Explanation

Proactive detection looks for indicators of fraud through analytics and monitoring when there is no known allegation. Reactive work is triggered by a complaint, loss or discovered incident. The other options describe reactive triggers or later legal stages.

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