A Framework of Applying Process Mining for Fraud Scheme Detection
26 Pages Posted: 30 Jun 2017
Date Written: June 29, 2017
Process mining has been used for auditing and internal control risk assessment as an audit analytical tool. This paper aims at providing a framework on how process mining can be applied to identify fraud schemes and assessing the riskiness of business processes. Specifically, the proposed framework captures how the patterns in process mining can be used to detect potentially fraudulent transactions. This paper contributes to the existing literature by associating notable variants/activities with potential fraud schemes and then assigning risk levels, which could be used as an automatic tool to test the fraud risk of every transaction. In addition, process mining enables auditors with the full population of event logs that can be used as non-financial information in fraud scheme detection.
Keywords: Process Mining; Financial Statement Fraud Detection; Fraud Schemes; Event Logs
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