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Seminars

Nigrini: Brief Bio with photos

Forensic Analytics: Methods and Techniques for Forensic Accounting Investigations

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 Benfordís 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.

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.

           

Microsoft Office and Forensic Accounting:

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.

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.

 

 

 

Benford's Law: The Facts, the Fun, and the Future

or Benford's Law: A Review, Relevant Findings, and Recent Applications

Conference plenary session

Luncheon talk

After-dinner talk

Benfordís 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 Benfordís Law and the legal process surrounding fraud convictions.

Nigrini believes that discovering Benfordís Law is like discovering a secret. Indeed, until about 30 years ago Benfordís 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. Benfordís 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 Benfordís Law will be interesting, entertaining and informative. Weíll 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 Benfordís original paper and an explanation of what Benfordís Law is and why we have these skewed digit patterns occurring.

- Examples of some interesting authentic data sets that followed Benfordís Law and some real-world fraudulent data sets that didnít follow Benfordís 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 Benfordís 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.

- 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.

- A review of the newest Benfordís 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.

- 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

    

The Secret Revealed The True Grounds for our Duty to Detect and Deter Occupational Fraud

Conference plenary session

Luncheon talk

After-dinner talk

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

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Ernst & Young, Toronto, 1/97

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Cargolux, Luxembourg

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With Tim Bell, KPMG, Montvale NJ

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Ministry of Finance, The Hague

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Orange County, CA, April, 1997

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Orange County, CA, April, 1997

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Cargolux, Luxembourg

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Baden Baden, Germany

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Interview, CBC Toronto

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Lunch presentation, ARCO, Pasadena

 

Stardust Hotel, May 2002

Stardust Hotel, May 2002

Microsoft Access seminar, Boise, ID

Number Games that people play Boise

Houston - Sept 2002 Houston - Sept 2002
 

Houston - Sept, 2002

 

Dallas - October, 2003 Dallas - October, 2003

Dallas - October, 2003

Dallas - October, 2003 Dallas - October, 2003

Dallas - October, 2003

Dallas - October, 2003 Dallas - October, 2003

Dallas - October, 2003

Dallas - October, 2003 Dallas - October, 2003

Dallas - October, 2003

Dallas - October, 2003

Princeton NJ - October '04

Princeton NJ - October '04

Princeton NJ - October '04

Montpelier VT - May 2005

Montpelier VT - May 2005

Montpelier VT - May 2005

Montpelier VT - May 2005

Montpelier VT - May 2005

Montpelier VT - May 2005

Phoenix - Morning Break

Phoenix - April, 2005 Phoenix - April, 2005

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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Mark J. Nigrini Ph.D.

55 Heath Court, Pennington, New Jersey, 08534

Tel: (609) 303-0533  E-mail: mark_nigrini at msn dot com