A conceptual model for proactive detection of potential fraud enterprise systems: exploiting SAP audit trails to detect asset misappropriation

Singh, Kishore Harichunder (2012) A conceptual model for proactive detection of potential fraud enterprise systems: exploiting SAP audit trails to detect asset misappropriation. [Thesis (PhD/Research)]

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Abstract

Fraud costs the Australian economy approximately $3 billion annually, and its frequency and financial impact continues to grow. Many organisations are poorly prepared to prevent and detect fraud. Fraud prevention is not perfect therefore fraud detection is crucial. Fraud detection strategies are intended to quickly and efficiently identify frauds that circumvent preventative measures so that an organisation can
take appropriate corrective action.

Enhancing the ability of organisations to detect potential fraud may have a positive impact on the economy. An effective model that facilitates proactive detection of
potential fraud may potentially save costs and reduce the propensity of future fraud by early detection of suspicious user activities. Enterprise systems generate millions
of transactions annually. While most of these are legal and routine transactions, a small number may be fraudulent. The enormous number of transactions makes it difficult to find these few instances among legitimate transactions. Without the availability of proactive fraud detection tools, investigating suspicious activities becomes overwhelming.

This study explores and develops innovative methods for proactive detection of potential fraud in enterprise systems. The intention is to build a model for detection
of potential fraud based on analysis of patterns or signatures building on theories and concepts of continuous fraud detection. This objective is addressed by answering the main question; can a generalised model for proactive detection of potential fraud in enterprise systems be developed? The study proposes a methodology for proactive
detection of potential fraud that exploits audit trails in enterprise systems. The concept of proactive detection of potential fraud is demonstrated by developing a
prototype. The prototype is a near real-time web based application that uses SAS for its analytics processes. The aim of the prototype is to confirm the feasibility of
implementing proactive detection of potential fraud in practice. Verification of the prototype is achieved by performing a series of tests involving simulated activity,
followed by a full scale case study with a large international manufacturing company. Validation is achieved by obtaining independent reviews from the case
study senior staff, auditing practitioners and a panel of experts. Timing experiments confirm that the prototype is able to handle real data volumes from a real organisation without difficulty thereby providing evidence in support of
enhancement of auditor productivity. This study makes a number of contributions to both the literature and auditing practice.


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Item Type: Thesis (PhD/Research)
Item Status: Live Archive
Additional Information: Doctor of Philosophy (PhD) thesis.
Faculty / Department / School: Historic - Faculty of Business and Law - School of Accounting, Economics and Finance
Supervisors: Best, Peter; Mula, Jooseph
Date Deposited: 04 Sep 2013 05:16
Last Modified: 18 Jul 2016 02:17
Uncontrolled Keywords: fraud detection; enterprise system; continuous monitoring; audit trail
Fields of Research : 15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150199 Accounting, Auditing and Accountability not elsewhere classified
URI: http://eprints.usq.edu.au/id/eprint/24018

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