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Seminars
Nigrini: Brief
Bio with photos
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1-Day
Workshop
This one-day workshop draws from the
topics covered in Forensic
Analytics by Mark Nigrini. Forensic analytics is the procurement and analysis of electronic data to reconstruct, detect, or otherwise support a claim of financial fraud. The main steps in forensic analytics are
data collection, data preparation, data analysis, and reporting. The goal is the detection of fraud, errors, and biases where biases involve people gravitating to specific numbers or number ranges to circumvent actual or perceived internal control thresholds.
This exclusive one-day workshop is a special opportunity to learn about Benford’s Law and other forensic analytic
tools and techniques. The seminar is presented by one of the pioneers in the field, and
includes demonstrations of running the tests in Excel and Access. The
workshop is aimed at auditors and investigators with a general day-to-day familiarity with obtaining and importing transactional data. No prior forensic knowledge is assumed.
The main topics are listed below:
Benford's Law: The fun, the facts, and the
future. An informative and interesting session on the primary,
advanced, and associated tests.
Accounts payable case study: An
interesting real-world case demonstrating the high-level overview
tests, the Nigrini Cycle tests, and the highly focused tests designed
to identify small groups of anomalous transactions.
Continuous Monitoring: An introduction
with a review of preventive, detective, and corrective controls.
The session includes innovative monitoring examples using correlation
together with leading-edge examples of monitoring using time-series
analysis. This part will also include an introduction to using
risk scoring in continuous monitoring.
Fraud and tax evasion examples: This fascinating
session discusses the Corley fraud, the Susan Thompson fraud, and the
Richard Hatch tax evasion drama, and the lessons that can be learned
from these three engaging cases.
Conclusion:
This intense conclusion looks at various aspects of the legal
environment that play a role in the prosecution of fraud cases and
makes a compelling case for effective internal controls and an
efficient, capable, and competent proactive fraud detection regime.
Click here
for the Forensic Analytics overview and outline as a pdf
document. 
Target
audience:
Internal auditors in the private and public sector that would like to use organizational data to effectively and efficiently create value.
External auditors that would like novel and new effective tools to assist in the external audit and also to create consulting revenues.
Valuation accountants
& security analysts that want to gain a competitive advantage with proprietary tools to
test data authenticity.
Corporate controllers that would like to introduce their staff responsible for internal controls to the power and efficiency of forensic analytics.
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Forensic Analytics:
Methods and Techniques for Forensic Accounting Investigations
2-Day
Hands-on Workshop
This two-day Forensic
Analytics seminar is essentially the
one day seminar plus a second day for hands-on work, coverage of discussion
and multiple choice questions, and a good coverage of innovative and
effective uses of technology (mainly Office 2007 and 2010) in forensic
analytics. The hands-on
work can be done in either Access, Excel, IDEA, or ACL. The case
solutions are however only presented in Excel and Access. The case
studies include extra assignments (something like AP classes in high school)
for power-users that might breeze through the case studies. The handouts are comprehensive and include data files, templates,
solutions, and PowerPoint slides. The hands-on case studies are
summarized below: 1.
Using accounts payable data calculate the total purchases per month and prepare a periodic graph using the
Periodic Graph template. 2.
Using accounts payable data prepare the data profile using the Nigrini
Cycle template. Review the data profile for (a) file completeness, (b) the proportion of low-value invoices, (c) zero invoices, (d) the number of credit memos, and (e) the negative amounts.
Run the first order Benford's Law test using the Nigrini Cycle
template. What are the five largest spikes on the first-two digits graph? 3.
Using accounts payable data run the number duplication test in
Excel. Which dollar amounts caused the five largest spikes on the first-two digits graph? AP1.
Answer the following end-of-chapter questions from Chapter 2 of Forensic
Analytics: Short answer questions 6-10, multiple choice questions
11-15, and Case 16 and 17. 4.
Using accounts payable data run the largest subsets test using Excel's
pivot table function. Find some interesting findings on the table. 5.
Open the Excel file Census_2000_2010.xlsx with the 2010 and 2011 county population numbers.
Run the largest growth test in Excel by calculating the percentage change for each state from 2000 to 2010. Your final result should look like Figure 10.17. Save the Excel file as Case_10_17.xlsx.
Do the results for any of the states seem anomalous?
6.
Use Excel's pivot table capabilities to create a table of the population totals for the 50 states.
Create a second smaller table showing just the total populations of CA, TX, NY, FL, IL, and Other. Use Excel's VLOOKUP function to get the populations of the five
states and the other states. Create an "Exploded pie in 3-D" pie chart from the data.
 AP2.
Answer the following end-of-chapter questions from Chapter 5 of Forensic
Analytics: Short answer questions 6-11, multiple choice questions
12-18, and Case 20. Shopper data with 12 million records from
Dunnhumby's Shopper Challenge in an Access format will be provided. Run the first-two digits test on all the positive values (i.e., >0).
Graph the results in Excel using the Nigrini Cycle template. Identify the three largest spikes on the graph.
Did you expect shopping data to conform to Benford? 7.
Using the 2010 and 2011 county population numbers, run the appropriate test in Excel to identify cases where a state has two or more counties with the same 2010 populations. For example, Texas might have ABC county and DEF county that each have 1,146 people.
Do the results for any of the states seem anomalous?
8. This is an introduction to Access. Import the
census data into Access and run the number duplication test using a query.
AP3. Answer the following end-of-chapter questions from Chapter
8 of Forensic Analytics: Short answer questions 6-10, multiple choice questions
11-15. Run the last-two digits test on the 2010 census data using the
Nigrini Cycle template.
Fraud and tax evasion examples: This fascinating
continuation discusses the O'Banion, Bajakajian, and Robbins cases, and the lessons that can be learned from these three
interesting cases.
Technology for Forensic
Analytics: This grand finale summarizes the materials over the past
two days and looks at five valuable tools for forensic analytics and also
looks at five selected features in the Office 2010 suite that are
particularly valuable (but not too well-known) for forensic
analytics. This conclusion will repeat various aspects of the legal environment that play a role in the prosecution of fraud cases and
will again make a compelling case for effective internal controls and an efficient, capable, and competent proactive fraud detection regime.
Click here for the
2-day Forensic Analytics overview and outline as a pdf document.
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Advanced Techniques, Effective Tests and Valuable Tips for
Excel, OneNote, Word, PowerPoint & Access
This
new forensic accounting seminar will take your Microsoft Office
(2007 or 2010) skills to a new level. The
seminar will place you in a forensic setting and will review the
applicable, innovative, effective, and efficient tools in the Office
suite. The
seminar will include 14 hands-on tests using real world forensic
files and forensic data. The seminar will devote three hours
to Excel, and from one to one and one-half hours to the other four
Office programs. The coverage of OneNote should be new to most
accountants and auditors. |
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Excel:
Creating an expense reimbursement or other form
in Excel. The
data validation routine. Protecting
worksheet and cells from changes, and password protection. Adding
worksheet comments. Using pivot tables and slicers. Benefiting
from workbook themes. Using
conditional formatting. Linking
and copying from Excel to Word and PowerPoint. Creating
professionally formatted reports from Excel workbooks and worksheets. The
usefulness of Consolidate, Group, Ungroup, Subtotal, filters, and advanced
filters. The utility of special Date and Text functions, and VlookUp and HlookUp. Using
Formula auditing and the Watch window. The
advantage of the text to columns procedure. Using
the Nigrini Cycle template. The
relevance of some data analysis functions (e.g., correlation) to forensic
accounting. Customizing
the quick access toolbar and Excel preferences. Important and worthwhile Excel tips, procedures,
skills, routines, and shortcuts.
Access
The
architecture of Access.
Importing
data into Access.
A review of
the different types of Access queries.
Converting
data from Excel's multi-column format into a usable database format.
Using the
data documenter in forensic investigations.
Including a
switchboard for a professional application. Creating
professional reports and exporting them to Word or OneNote. Important and worthwhile
Access tips, procedures, skills, routines, and shortcuts.
Word
The structure and contents of forensic reports.
Problems and pitfalls to avoid.
Formatting considerations and options (e.g., footnotes) available in Word.
Inserting comments, tracking changes, and comparing and combining documents.
Using advanced table features.
Creating an index and a table of contents.
Important and worthwhile
Word tips, procedures, skills, routines, and shortcuts.
OneNote
An overview
and a tour of the OneNote workspace.
Protecting
notes with passwords and backing up important files.
Taking and
formatting notes.
Organizing
and searching notes.
Sharing
notes with other people.
Important and worthwhile
OneNote tips, procedures, skills, routines, and shortcuts.
PowerPoint
Planning the Presentation.
Color Schemes for
forensic presentations.
Problems and
pitfalls to avoid.
Copying
screenshots to PowerPoint.
Copying from
Word and Excel to PowerPoint.
Adding art
and graphic objects in forensic presentations. Including
graphs, tables, and diagrams. Build
multimedia into your presentation. Valuable
considerations for the actual presentation.
Important and worthwhile
PowerPoint tips, procedures, skills, routines, and shortcuts.
Click here for the
Office and Forensic Accounting overview and outline as a pdf document. |
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Benford's Law: A Review, Relevant Findings, and Recent Applications
Conference
plenary session
Luncheon
talk
After-dinner
talk
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Benford’s Law has been the research passion of Mark Nigrini, an associate
professor on the faculty at The School of Business of The College of New Jersey where he teaches financial accounting, managerial accounting and forensic accounting courses. His current line of research addresses
advanced theoretical work on Benford’s Law and the legal process surrounding fraud convictions.
Nigrini believes that discovering Benford’s Law is like discovering a secret. Indeed, until about 30 years ago Benford’s Law was a rather well kept secret. Since that time the secret has slowly but surely made itself known to more and more people (mainly auditors in their quest to uncover corporate malfeasance).
In the 1930s, a physicist named Frank Benford discovered that there were predictable patterns to the digits in lists of numbers. His results showed that the digits were not expected to be equally likely in tabulated data. The digit 1 is expected to occur about six times more often as a first digit than the digit 9. Benford’s Law gives us the expected frequencies for the digits in the first, second, and third positions, and
also for digit combinations (such as 64). Nigrini first proposed that
auditors could use Benford's Law to detect anomalies in client data.
Our talk on Benford’s Law will be interesting,
entertaining and informative. We’ll start in the past and move to the future in a logical order,
- A look at a historical document from 3,000
years ago and a lively discussion of Benford’s original paper and an explanation of what Benford’s Law is and why we have these skewed digit patterns occurring.
- Examples of some interesting authentic data sets that followed Benford’s Law and some
real-world fraudulent data sets that didn’t follow Benford’s Law.
- The talk will include amusing anecdotes such
as Benford's other discovery and Benford's house in Schenectady, NY.
- Fun examples will be mentioned throughout
including my analysis of the tax returns of former President Clinton, and
my attempt to show him my work
- A note on some
of my remarkable applications of Benford’s Law to earth science data that was published in
Mathematical Geology.
- The close-to-home examples include revealing
how income tax evasion may be detected using Benford's Law and the
link to the lottery.
- A secretive look at some suspicious activity
on Bernie Madoff's American Express statement and some Madoff family expenses.
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I'll share some work in progress where I've looked at data from the
Madoff Ponzi scheme with some promising results suggesting that
Benford's Law can be used to detect made-up Ponzi numbers.
- An engaging study of the seismic data on the Magnitude 9 earthquake of the west coast of northern Sumatra on 26 December, 2004, and other earthquakes in
2010 and the link to Benford's Law.
- Saving the best for last, an intriguing
demonstration of the link between Benford's Law and The Da Vinci
Code by Dan Brown.
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A review of the newest Benford’s Law theorem that shows that the
digit patterns of the differences between the ordered elements of
any data set should tend towards the frequencies of Benford's
Law. The first reaction of mathematicians to my findings was
some skepticism, but the theorem is true.
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The exciting grand finale is an examination of the digit and number
patterns in Enron's and AIG's accounting reports and the similarity
between those patterns and the patterns found in Facebook's
accounting reports.
This outline is available as a PDF
document. |
ACFE
annual conference 2012
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Conference plenary session
Luncheon talk
After-dinner talk
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Nigrini first presented this talk at the 23rd World Continuous Auditing & Reporting Symposium, at Rutgers Business School, Newark, NJ, in November, 2011 http://raw.rutgers.edu/23wcars. Since that time the talk has become a formal book proposal and has gone through a few title changes. The talk has been presented about ten times since the debut and it has intrigued audiences and stimulated lively discussions at each delivery.
In an engaging, intriguing, and entertaining style Nigrini reviews four fraud case studies and concludes each episode with the sober and practical lessons that can be learned from each case. Each event and misfortune has been thoroughly researched and Nigrini brings much more than just court documents, exhibits, and transcripts to the table.
Nigrini then changes gears and in a more pensive and reflective style he presents a careful, comprehensive, and detailed argument showing that both the legal systems are the penal systems are overloaded. Supporting evidence is drawn from American Bar Association and U.S. Department of Justice publications, and original empirical research on incarceration data. The research shows that relatively few fraudsters are committed to correctional centers and that the light sentences handed out for fraud and embezzlement are not much of a deterrent. The research also shows that fraud cases are inevitably stayed, delayed, or reduced to a plea agreement because of the high caseloads from violent crimes and major thefts.
Nigrini concludes the legal section with a quick look at the Federal Sentencing Guidelines Manual (see
http://www.ussc.gov/Guidelines/Organizational_Guidelines/index.cfm) and the seven key criteria needed for a company to claim that it has an effective compliance program with standards and procedures reasonably capable of reducing the prospect of criminal activity.
On a bright and optimistic note Nigrini concludes that organizations have an obligation to secure a reliable suite of internal controls, and to regularly employ effective and efficient proactive fraud detection programs. The courts cannot be relied upon to punish or deter fraudsters.
The
Secret Revealed outline is available as a PDF document. |
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IAAIA presentation,
Bangkok, 11/1998 |
Ernst & Young,
Toronto, 1/97 |
Cargolux, Luxembourg |
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With Tim Bell, KPMG,
Montvale NJ |
Ministry of Finance,
The Hague |
Orange County, CA,
April, 1997 |
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Orange County, CA,
April, 1997 |
Cargolux, Luxembourg |
Baden Baden, Germany |
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Interview, CBC Toronto |
Lunch presentation,
ARCO, Pasadena |
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Stardust Hotel, May
2002 |
Stardust Hotel, May
2002
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Microsoft Access
seminar, Boise, ID
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Number Games that people play Boise |
Houston - Sept 2002 |
Houston - Sept 2002 |
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Houston - Sept, 2002
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Dallas - October, 2003 |
Dallas - October, 2003 |
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Dallas
- October, 2003 |
Dallas - October, 2003 |
Dallas
- October, 2003 |
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Dallas - October, 2003 |
Dallas - October, 2003 |
Dallas - October, 2003 |
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Dallas - October, 2003 |
Dallas - October, 2003 |
Dallas - October, 2003 |
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Dallas
- October, 2003 |
Dallas
- October, 2003 |
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Princeton NJ - October '04 |
Princeton NJ - October '04 |
Princeton NJ - October '04 |
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Montpelier
VT - May 2005 |
Montpelier
VT - May 2005 |
Montpelier
VT - May 2005 |
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Montpelier
VT - May 2005 |
Montpelier
VT - May 2005 |
Montpelier
VT - May 2005 |
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Phoenix - Morning Break |
Phoenix - April, 2005 |
Phoenix - April, 2005 |
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California - June, 2005 |
California - June, 2005 |
California - June, 2005 |
| Photos and notes are now posted on Facebook
at Forensic
Analytics by Mark Nigrini and
at Benford's
Law by Mark Nigrini, and
at Losing the war
Against Fraud by Mark Nigrini. |
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