Benford’s Law in Hollywood and four more fraud stories
Hollywood: Not only is he an expert sniper and a martial artist, Ben Affleck’s character in the movie The Accountant can quickly leverage Benford’s Law to find suspicious transactions. In the recently released Hollywood movie, Affleck’s character combs through years of financial data and identifies fraudulent transactions in the books of a medical robotics firm thanks to the unusual frequency of the number three in their dollar values.
While the ledgers, methodologies and use of Benford’s Law were fairly realistic, Affleck’s embroilment in a dangerous plot with multiple shooting scenes along with the ability to analyze 15 years of financial data in a single montage is slightly less so (unless, of course, he was using CaseWare IDEA for the analysis). Realistic or not, accountants should rejoice because one of their own saved the day.
Want to know more about Benford’s Law? Here is a quick presentation on how it was developed and its applications:
UK: Three former Tesco directors are facing fraud charges for their role in the retailer’s £263m accounting scandal, where they allegedly falsely inflated supplier income. In addition to reputational damage, Tesco is also facing a £150m legal claim from a group of 60 shareholders who claim they lost money following the supermarket’s accounting scandal.
France: A French prosecutor is calling for HSBC to stand trial for enabling French clients to hide more than €180 billion from the taxman. Authorities have also placed UBS Group AG under formal investigation for alleged tax fraud and money laundering; the organization has also been asked to pay a bond of €1.1 billion. A unit of J.P. Morgan Chase is under investigation for tax fraud, as well.
Malaysia: According to a New York-based corporate investigations and risk consulting firm, corporate fraud in Malaysia is on the rise. The Kroll Global Fraud Report 2015/2016 found that fraud increased by 14% over a three-year period and that 75% of survey respondents were victims in the past year. The report also found that 69% of companies suffered financial losses due to fraud, compared with 64% in 2014.
Rwanda: According to experts attending the Afreximbank Due Diligence and Corporate Governance forum, money laundering, bribery, fraud, and tax evasion and other financial crimes continue to undermine sustainable economic development in the region. Many fraudsters are using technology to evade taxes and send money outside the continent undetected; however, regulators and governments are aware of the issues and are working toward strengthening corporate governance and surveillance.
Want to learn about how to take steps to reduce fraud in your organization? Take a look at some our recent industry presentations on this topic.
About Anu Sood:
Anu Sood is the Director of Product and Corporate Marketing at CaseWare Analytics and is responsible for the company’s global marketing strategy. Prior to CaseWare Analytics, Anu worked in various roles in the high-tech industry and her accomplishments range from writing software for telephone switches to launching a new global satellite communication service. Anu has extensive experience in strategic marketing, corporate communications, demand generation, content marketing, product management, product marketing and technology development.