INVESTIGATIVE AND DIAGNOSTIC TOOLS FOR COVERING FRAUD: INSIGHTS FROM THE FORENSIC ACCOUNTING FIELD

Cynthia Waddell
Purdue University Global

ABSTRACT

An organization that has an “internal audit department” has a significant component to
reduce the occurrence of fraud. Internal auditors can greatly enhance an organization by utilizing
some basic data analytic tools used by forensic accountants. These basic investigative and
diagnostic tools should be used by every internal auditor. This study reviews and analyzes
fundamental data analytic techniques and the application in the investigation of observed “red
flags” when considering internal controls to improve the detection of fraud, examining cases of
asset misappropriation, corruption, and financial statement fraud.
Keywords: Internal audit, forensic, internal control, data analysis