Many types of litigation (e.g., allegations of fraud, commercial litigation, matrimonial) require forensic accounting analysis. These investigations often require the analysis of large amounts of data. The more complex the fraud or investigation, the more data there is that must be analyzed. When large amounts of data must be analyzed, such analyses can overwhelm the capabilities of most standard software and can take significant amounts of time to complete.
However, specialized data extraction software, such as IDEA Data Analysis Software (“IDEA”) and ACL, can handle large amounts of data and enable quick analysis, saving both time and expense. In a recent forensic investigation, Citrin Cooperman forensic accountants used IDEA software to uncover a complex fraud while saving the client significant time and expense in conducting the investigation.
Our client was a multi-location retailer whose president believed that its Controller, a Store Manager, and others had conspired to defraud the company. Our initial analysis showed that the conspiracy involved a series of fraudulent customer transactions whose balances were adjusted through the application of phony credits and write-offs. In order to identify the players and understand the magnitude of the fraud, we had to analyze over 1 million transactions comprising over 8 gigabytes of data. This analysis required examining many different criteria, including persons with multiple aliases; multiple people with the same home address; relatives of the primary alleged fraudsters; purchases from multiple locations; etc. With conventional software such as Excel or Access, it would have taken two people between two and three weeks to perform this analysis. However, by using IDEA, it took only one person just three days to perform this analysis.
The result of our forensic investigation was that we uncovered a complex scheme consisting of multiple frauds and conspiracy among multiple parties, and we identified all losses (totaling over $150,000)from the frauds and conspiracy. By using IDEA, Citrin Cooperman saved the company several weeks of time and over $50,000 in expenses in performing the forensic investigation.
If you have a client who requires a fraud or forensic investigation involving large amounts of data, your client should consider engaging Citrin Cooperman forensic accountants to perform the investigation. Our use of IDEA data extraction software can save your client significant time and expenses.