In more than a quarter century as a forensic accountant, I have
encountered many corporate executives, managers, and staff who
allegedly committed fraud. Every one of these “characters” has
been fascinating and somewhat mysterious, like the protagonist in a
whodunit. Each person apparently decided to falsify records or give
untruthful or misleading answers to questions. Nevertheless, in every
case, an objective analysis suggested to me it was inevitable that they
would, in time, get caught. Their actions conflicted with basic common
sense, but these apparently smart businesspeople went ahead
anyway. Why? That is the riddle that hooked me on a career fighting
fraud.
Data analytics now offers powerful tools and techniques to help
deter or more quickly detect potential wrongdoing, reaching into
huge populations of data and identifying anomalies that merit further
investigation. Behavioral forensics has similar potential to help
businesspeople identify anomalous behaviors that may indicate a
heightened risk of fraud or other wrongdoing. In terms of widespread
practical implementation, behavioral forensics may be some
years behind data analytics, but its potential is just as exciting.