《优》Detectlets for Better Fraud Detection.pptVIP

Detectlets for Better Fraud Detection Conan C. Albrecht, PhD Marriott School of Management Brigham Young University Today’s Presentation Give a few fraud stories Outline the Detectlet vision and Picalo Architecture Show example code and working products Describe future research directions and solicit help Two Types of Fraud Fraud on behalf of an organization Financial statement manipulation to make the company look better to stockholders Also called management fraud Fraud against an organization Stealing assets, information, etc. Also called employee or consumer fraud ACFE Report to the Nation Occupational Fraud and Abuse 2 1/2 year study of 2608 Frauds totaling $15 million Fraud costs U.S. organizations more than $400 billion annually. Fraud and abuse costs employers an average of $9 a day per employee The average organization loses about 6 percent of its total annual revenue to fraud and abuse admitted to by its own employees Ernst Young Fraud Study 2002 (Europe) One in five workers are aware of fraud in their workplace 80% would be willing to turn in a colleague but only 43% have Employers lost 20 cents on every dollar to workplace fraud Types of fraud Theft of office items—37% Claiming extra hours worked—16% Inflating expenses accounts—7% Taking kickbacks from suppliers—6% Cost of Fraud Fraud Losses Reduce Net Income $ for $ If Profit Margin is 10%, Revenues Must Increase by 10 times Losses to Recover Affect on Net Income Losses……. $1 Million Revenue….$1 Billion Fraud Cost….Two Examples Automobile Manufacturer $436 Million Fraud Profit Margin = 10% $4.36 Billion in Revenues Needed At $20,000 per Car, 218,000 Cars A Recent Fraud Large Fraud of $2.6 Billion over 9 years Year 1 $600K Year 3 $4 million Year 5 $80 million Year 7 $600 million Year 9 $2.6 billion In years 8 and 9, four of the world’s largest banks were involved and lost over $500 million Every Person Has A Price Abraham Lincoln once threw a man out of his office, angrily turning down a substant