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CS Professional · Internal and Forensic Audit · Special Points relating to Internal Audit in various Entities

While auditing Bharat Micro Credit NBFC, the internal auditor notices that several loans were disbursed to different borrowers whose bank account numbers and mobile numbers are identical. Which fraud-detection technique is most suited to identify more such cases across the whole loan book?

Data analytics using duplicate-field matching on the borrower master and disbursement files is most suitable. It tests the entire loan book for shared bank accounts or mobile numbers, which are red flags of ghost borrowers, something manual sampling or unrelated reviews would likely miss.

  1. AData analytics using duplicate-field matching on borrower master and disbursement filesCorrect
  2. BReviewing only the board minutes of the last year
  3. CPhysical verification of office furniture
  4. DRatio analysis of the share capital

Explanation

Identical account or mobile numbers across borrowers suggest ghost or benami borrowers. Running duplicate-matching analytics on the full database tests the entire population quickly. Board minutes, furniture checks and capital ratios do not detect such patterns.

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