Download Chapter 18

Purchasing card fraud
Analysis of purchasing card data
Note on forensic analytic tests
Concluding remarks
Prepared by:
Mark J. Nigrini
Copyright © 2012 by Mark J. Nigrini. All rights reserved.
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Charge card that allows an employee to
conveniently buy goods and services.
Cards have written rules and procedures
Which items may be purchased, approval
process, and reconciliation process
Bank invoices the company every month
Card gives an employee the opportunity to
commit fraud.
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$80,000: Including EZ-Pass toll tags, expensive
remote controlled helicopters, and a dog
$150,000 in automobile, building, and home
improvement supplies
$30,000: computer, rings, purses, and clothing
from Victoria's Secret, Calvin Klein, and others
$630 charged for escort services
down payment of a $10,000 sapphire ring for
$2,400 at E-Z Pawn...
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NAPCP provides services and guidance
CPCP designation
www.napcp.org
They research p-card issues
Survey showed that industry practice
varied widely with respect to the % of
transactions that were audited
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Tests would work well in a continuous
monitoring environment
Some tests run weekly, monthly, and quarterly
Tests will detect large errors and changes
Not effective for waste and abuse
Special tests to detect personal purchases
Cards give employees an opportunity to
commit fraud
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Analytics is only one part of the forensic
investigations process
Collect and analyze data at the start
Don’t use incomplete or inaccurate data
Make use of a subject matter expert
Remember the legal environment
FA is still an evolving discipline
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Purchasing cards give employees opportunity
GAO found many fraud cases
Can use the high-level and the drill down tests in
a continuous monitoring environment
P-card analysis well-suited to a using a dashboard
Tests can show split purchases and other control
issues
Tests can be run in Access or Excel
Fraud is here to stay
Forensic analytics is still evolving