Forensic Accounting Technology: Big Data Analytics

Big data in accounting offers a significant opportunity for a variety of firms and practices. The massive amounts of information reveal trends, anomalies, and opportunities that smaller data sets could never reveal. Using big data with forensic accounting technology gives practitioners an upper hand in discovering potential fraud.

What is Big Data

Big data is typically thought of as data in massive quantities that could not otherwise be managed without the assistance of technology. Big data is collected and measured using four Vs:

• Veracity

• Volume

• Velocity

• Variety

Veracity speaks to the value of the data – is it quality and can it be relied upon? Volume refers to the sheer amount of data that can be accessed and analyzed in a meaningful way. Velocity is the speed at which that data can be accessed and analyzed. Variety means the pulling of different types of data into one, usable place.

Big data is associated with complexity and speed – allowing massive amounts of complicated data sets to be processed and analyzed for insights in almost an instant (give or take). Analysis that would have taken whole teams a lifetime to complete can be done almost immediately with machine learning.

Thanks to the digital transformation acceleration over the last few years, your business clients now produce massive amounts of digital information. While this is fantastic for strategic planning, delivering custom experiences, and providing valuable insights for a client, the downside is the increased risk of fraud.

When dealing with data at this volume, hiding fake customers, creating non-existent employees to run charges through, and other fraudulent behavior becomes much easier to hide. Who is going to notice 10 fraudulent expenses on a list of 10 billion charges?

Forensic accountants. That’s who.

Why Forensic Accountants Should Use Big Data Analytics

Without the ability to find actionable insights, big data is, in essence, useless. Fortunately, finding insights in data is the exact superpower that forensic accountants bring to the table.

The power of big data in accounting lies in the expansion of the things accounting professionals already do. Accountants already collect and analyze data sets, putting the profession in a unique place to maximize the benefits of working with nearly unlimited data.

For forensic accountants using big data, according to an AICPA Case Study, ensuring data is “complete and accurate is the biggest challenge, followed by getting it into a usable format.” Fortunately, tools, like Strongbox, built specifically for accounting professionals, have emerged to solve these problems.

The best forensic accountant can pour through massive amounts of financial data to uncover potential fraud. Imagine the potential power of combining that skill with the exponentially larger data sets that big data can provide.

Here are some benefits of big data in forensic accounting:

• Better Fraud Detection

• Real-Time Access

• Risk Identification

• Data Visualizations

Better Fraud Detection

One problem many forensic accountants face is gaining access to ALL the information they need. With big data analytics, that problem becomes much simpler. Big data software like Strongbox can extract all the information, down to each individual transaction, from an accounting system instantly without ever having to rely on the client to produce and send reports. The direct connection leaves less room for manipulation by a bad actor and gives the forensic accountant a complete financial report to work with. With a full report backed by machine learning, fraud becomes much easier to detect and much harder to hide.

Real-Time Access

Big data can help accountants with limits to data visibility. Relying on yearly and monthly reports limits the forensic accountant’s ability to sync information. Real-time access to accounting data can help instantly spot errors before they have the chance to become a bigger problem, improving efficiency and saving both time and money for the client.

Risk Identification

Big data analytics can help to eliminate the guesswork about where a company might be at risk. For forensic accountants, this can help more easily “follow the money.” Identifying the areas where risk is most likely allows an investigation to begin where fraud has the best potential to be found, even if that source is not obvious.

Data Visualizations

With the help of software like Strongbox, massive amounts of financial information can be presented through visualizations that help show patterns, flows, irregularities, and exceptions much more easily. Data visualizations can be especially helpful for testifying at trial where forensic accountants are often tasked with simplifying complex financial information in a way a jury can understand.

Big Data in Accounting

Big data is an opportunity for forensic accounting practices to expand and offer even greater service. Firms that adopt forensic accounting technology can adapt to and use big data’s possibilities and predictive capabilities, giving them a competitive advantage other firms can’t match. We’ve helped forensic accounting practices implement Strongbox to help them quickly access clean, validated financial data, complete with forensic checks and data visualizations. Contact us today to start using big data at your firm.