Finding fraud in the world of big data requires new skillsets above and beyond basic forensic accounting, including the ability to develop machine-learning-capable artificial intelligence and other custom tools to detect irregularities amidst vast amounts of digitised financial data.
Because this is such specialised knowledge, it’s increasingly necessary to build teams that combine traditional forensic accounting skills with tech talent, according to Katy Wong, CPA (Hong Kong), a forensic accounting partner at KPMG Hong Kong.
“There’s no such thing as one tool that will solve all of your clients’ problems,” she said. “Often, that means creating customised solutions — and in today’s increasingly digitised world, that requires diverse talent. You need the right team.”
Making these teams work together efficiently can be tricky and requires a certain amount of managerial finesse.
Here are three ways to build a tech-forward forensic accounting team that maximises the use of machine learning to detect fraud.
Put forensic accountants and data scientists together from the start. While most big firms have in-house IT talent, these professionals traditionally work in different departments from forensic accountants. According to Wong, this is a mistake.
“You want to put two groups of people with different skills on the same team, instead of having them in different departments. This is key,” said Wong. “You need tech talent, and you need forensic accountants, and you need them to be working together from the very beginning.”
IT talent should have a working knowledge of the most frequently used enterprise resource planning database software — Oracle, SAP, and others — as well as knowledge of how to run analysis using SQL coding and a deep understanding of data analytics, according to Dakai Liu, KPMG’s forensic technology partner in mainland China. Liu said he generally looks for candidates with a background in SQL coding and software with one to two years of experience building different data systems and who are genuinely interested in forensics.
“Investigative skills aren’t usually taught to people in the software industry, so they have to learn it on the job,” he said. “But that interest in investigations should be there. You want someone who wants to be the next Sherlock Holmes.”
Prepare for culture clashes, and be humble. Ensuring that a team with different skillsets succeeds requires that both IT talent and forensic accountants are open to learning from one another. This may sound intuitive, but according to Wong, culture clashes between the two professions are common and can make working together difficult.
For example, forensic accountants who have been working in the field for years might not appreciate how difficult or time-intensive it can be to extract certain datasets from existing software. Or they might phrase requests for data in ways that are unintentionally vague or restrictively precise, giving way to results that are unhelpful to the investigation. Tech talent, on the other hand, might be keen to develop solutions that aren’t necessarily tailored to the purposes forensic accountants actually need.
To help facilitate good communication, Liu recommends hosting periodic workshops that help team members better understand what’s involved in the other’s job. That might mean having an IT specialist walk the forensic accountants through exactly how they got data for a specific request or having accountants explain how they approached a previous investigation that was successful in detecting fraud. This way they can better understand others’ needs and capabilities, helping them to grow together as a team.
Prioritise client needs. With so many new tech tools available, it can be easy to get distracted by the newest flashy solution. However, that can lead firms to spend a lot of money on tools that aren’t necessarily going to solve their clients’ problems.
“A lot of firms make the mistake of thinking they need the most advanced tool and invest a lot of money in technology that ultimately doesn’t help their client,” Wong said. “You’d be surprised how often this happens.”
That’s why, prior to adopting or creating a new tool, the forensic teams should be crystal-clear on the clients’ needs. After those needs are identified, accountants and tech talent can work together to pick the best tools for the job.
“We have to remember that at the end of the day, our job is to give the client good advice to help them solve a problem,” Wong said. “Even having the best, flashiest new tools isn’t going to help if you don’t understand the clients’ real needs.”
— Malia Politzer is a freelance writer based in Spain. To comment on this article or to suggest an idea for another article, contact Drew Adamek, an FM magazine senior editor, at Andrew.Adamek@aicpa-cima.com.