Importance

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Abstract

A system and method of determining whether fraudulent accounting activity may have taken place in a business. First, financial data regarding the business is received. A determination is then made as to whether any anomalies are present in the financial data. Such anomalies are referred to herein as 'red flags'. Any given red flag may be a manifestation of one or more particular fraud tactics. Conversely, for any particular fraud tactic, a number of associated red flags may be present. For each of a plurality of fraud tactics, the number of red flags associated with the tactic is determined. For each fraud tactic having an associated red flag, a determination is made as to whether the tactic took place in view of the number of red flags that are associated with the tactic. A determination is then made as to whether fraudulent accounting has occurred, based on the number of tactics determined to have taken place. Finally, an indication as to an inference of fraud is generated.

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First Claim