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CONCLUSION

Repetitive or continuous monitoring procedures are a good business practice.

Automating tests in various areas will allow you to identify issues or anomalies shortly after they occur when using repetitive testing. Repetitive testing can be employed for each audit cycle but, better yet, can be scheduled at more frequent intervals. Once the tests are in place, very little manual efforts are needed and only require someone to review any anomalies. Continuous monitoring identifies anomalies as they occur or at specified intervals. Continuous monitoring need not be in real time. The automated analytics can be executed daily, weekly, monthly, or for any logical business cycle timelines. Notifications can be set so that reports or e-mails are issued as soon as the anomalies are detected. Once the automated procedures are in place, timely exception notifications allow for the early detection of fraud. Automated procedures would allow you more time to investigate and develop new detection procedures in other areas. Over time, more and more automated analysis can be developed and implemented to mitigate the risks of fraud.

Automated analytical techniques may be looking for outliers and anomalies of transactions that are not the norm. Statistical calculations may be employed to highlight items too far from the standard deviation or expected averages. Some of the highest values and lowest values should be included in your review of abnormal items. Grouping transactions by specific classes, such as location or dates, may reveal unusual patterns that are not typical of other locations or dates. Automated techniques need to be adjusted along with the dynamic business environment. Modern-day businesses are ever changing, whether due to mergers, acquisitions, or implementing new products or business lines. Performing the same tests without consideration of the changing business structures and systems may make those tests and procedures obsolete.

These techniques and tests do not detect fraud but rather allow you the opportunity to detect fraud.

NOTES

1. Merriam-Webster, "Sampling," accessed December 27, 2013, merriam-webster .com/dictionary/sampling.

2. Don Peat, "Mayor Rob Ford's Popularity Holding Steady, New Poll Shows," Toronto Sun, November 22, 2013, torontosun.com/2013/11/22/mayor-rob-fords-popularity-impressive-new-poll-shows.

 
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