Case studies Case study Fraud investigation— financial loss assessment US$4.2b Data-driven financial reconstruction in a regulatory investigation Data-driven Fraud financial investigation— reconstruction financial loss in a regulatory assessment investigation Industry: Power and utilities Industry: Manufacturing Country: Eurozone Country: United States The situation: The situation: A publicly traded technology manufacturer received a A multinational utilities company faced major financial loss for subpoena from a regulatory authority alleging improprieties fraudulent credit notes and the manipulation of billing data. around revenue recognition. How FDA helped: How FDA helped: The project team collected and analyzed nearly 1 TB of The use of FDA helped the investigation team model the data from SAP IS-U (SAP Module for Utilities) to assess order-to-cash process, including sales orders, invoices, the losses and potential impact on the organization and to receipts, shipping, discounts and rebates. The team then identify control weaknesses for immediate remediation. They executed tests to isolate the timing of certain transactions first conducted a data mining and clustering procedure to and identify high-risk customers for further inquiry. Advanced understand the variety of billing and credit entry processes. FDA techniques included using text analytics to analyze The analyses were then used to identify potential fraud the free-text notes column in the order entry system to patterns by applying statistical methods and customized data understand the nature of payments and identify suspicious analytics. The results revealed more fraud patterns and the language or corrupt intent. As a result, the company was able fact that outside collaborators were involved. The outcome to analyze 100% of the sales data within the time period for helped the company assess the damage for insurance which they were required to respond to the subpoena and run claim purposes and take immediate actions to implement targeted tests to evaluate the sufficiency of the regulator’s remediation procedures within its control environment. The claims on an expedited basis. company now plans to implement a monitoring program leveraging the FDA tools developed during the investigation. Global Forensic Data Analytics Survey 2016 | 11