•Suppose your firm is auditing a company, and is worried that someone in the top 5 highly compensated people within the management group was committing fraud. Describe how data mining/fraud detection...

FRAUD DETECTION BY AUDITOR
FRAUD DETECTION BY AUDITOR        3
FROM: KHUSHBOO MURARKA
DATE: 18/03/2019
SUBJECT: FRAUD DETECTION BY AUDITOR
Brief introduction:
The highly compensated people are generally the top management of the company who run the company and take the strategic decisions. Generally, these persons are responsible for big scams of frauds in a company. As an auditor, it is our responsibility to detect the fraud and to perform all the audit procedures which are required to perform. Detecting management fraud is a difficult task using normal audit procedures. Statics and data mining techniques are used to detect management fraud. The primary data mining techniques include classification, clustering, associations, prediction and characterization.
Detection of fraud using data mining/ fraud detection system:
For detection of fraud the auditor should include symptom detection steps in their audit program. There is a five-step approach to detects management fraud, the auditor should use this approach as below:
a. Know the exposures to fraud
b. Know the symptoms of occurrence which may be caused to fraud
c. Be alert for symptoms and behavior indicators which will be resulted into...