Forensic Analytics, 2nd Edition

CHAPTER 1Using Microsoft Excel for Forensic Analytics

THIS CHAPTER SETS THE stage for our foray into the art of forensic analytics. We will review the three fraud types that are relevant to the analytics tests discussed in this book. We will also look at the main ways in which occupational frauds are discovered. The chapter will also review the main steps in a forensic investigation. The chapter includes a discussion of the main features of Excel 2016 (Excel) that make it a very useful tool for forensic analytics. While Excel 2019 and Excel in Office 365 ProPlus are available at the time of writing, the assumption is that most users are still using Excel 2016, and so the relevant new features are reviewed separately in the supplements to this book.

THE FRAUD TYPES RELEVANT TO FORENSIC ANALYTICS

The FBI defines fraud as the intentional perversion of the truth that causes another person or other entity relying on the non-truth to give up something of value. Under their definition fraud schemes are wide-ranging and include credit card fraud, health insurance fraud, identity theft, internet auction fraud, Ponzi schemes, telemarketing fraud, and advance fee schemes. A coverage of all those topics is too much for one book, and so we are going to focus on the three main branches of the fraud tree set out in the highly regarded and often cited Report to the Nations published by the Association of Certified Fraud Examiners (ACFE).

The first fraud type is occupational fraud (also ...