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DATA ANALYTICSA practitioners perspective

Forensic Accounting ConferenceICAI Bangalore BranchFeb 2016

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WHAT IS ANALYTICS?

The scientific process of transforming data into insight for making better decisions.

Analytics often involves studying past:- historical data to research potential trends, - to analyze the effects of certain decisions or events, or - to evaluate the performance of a given tool or scenario

It is the discovery and communication of meaningful patterns in data.

01

03

02

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ANALYTICS AND ITS TYPES

Descriptive AnalysisIts to analyseinformation to know what is happening. This is where one understand facts

Diagnostic AnalysisThis is to analyse why did certain things happen. Understanding the root cause of a trend / pattern

Predictive AnalysisUnderstanding how a pattern would perform in future

Prescriptive AnalysisThis is to determine future course of action based on the trend

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Type of Codes

Movement Types101 – Goods received for Purchase122 – returned delivery to vendor161 – Returns for Purchase orders261 – Goods Issue for an Order

Transfer TypesMB1B – Transfer PostingLT01 – Create Transfer OrderABUMN – transfer within Company CodesMF65 – Stock Transfer for reservation

Transaction TypesGoods Receipt NoteConsumption AccountingMovement to ScrapGoods Sent to Vendor for Job work

CODES USED IN SAP

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CASE STUDY

Warehouse Manager

Responsible for inventory levels &

provisions

Inventory levels were increasing

To reduce provisions

Materials sent for repair is recorded as received

2nd – 5th

25th to 31st

SCRAPGOOD

Exchanging high value material with low value

materials

Transfers were made between scrap and good

storage locations

Materials at customer locations were recorded

as received back

Inventory became negative during

month end

Review

Series of SAP movement entries

+Inconsistent

weighted average prices

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ELEMENTS OF DATA ANALYTICS

Data

Process

Skill & Tools

- Structured / Unstructured

- Descriptive or Numbers

- Standards- Threshold- Stages of data

movement- Data updation- Data reliability - Analytical

- Process- SQL, Idea, ACL,

SAS

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INTERNAL AUDIT AND FRAUD DETECTION

Pattern

Tre

nd

A

na

lysis

Co

ntr

ol

Exc

ep

tio

ns

Correlation Analysis

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GATHERING RELEVANT INFORMATION

Documents

People

Security Register

Physical Verification

Invoices

Scrap Records

Guard / Security Personnel

Auditor

Sales Representative

Production Manager

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DATA ANALYTICS -STILL IN EARLY STAGE

Reasons

Multiple Sources

Unstructured data

Unrecognised Patterns / Low awareness on pattern recognition

Reliance on Tools thantechniques

False positives

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