Data Desk Reveals Books that Have Been Cooked
Jack Seward is a forensic accounting expert who uses Data Desk to identify cases of accounting fraud. His expertise is most often sought by lawyers involved in bankruptcy litigation. While there are other situations in which he has been asked to analyze a company's accounts, he says almost all of them feature "insolvency and litigation."
He says his first step is to establish a timeline to track when data came into existence, when they were deleted or recovered, or when an entire database was declared corrupted and became the source of a second set of books.
"What I am looking for," he said about examining huge volumes of transaction data, "are anomalies." His analysis might turn up, for example, an alteration in the timing of business activities, a change in profit margins, a source of sales other an customer invoices. Because Data Desk is so good at revealing outliers, it's a great tool for searching for "some little indication that something is out of whack."
A number of factors outside his analyses make his investigations difficult. Cases often take up to a year or two to develop. He is often examining multiple databases, each with thousands of datapoints. He has no opportunity to revise his work. And, perhaps most difficult, his results have to be easily communicated to people who are not statisticians. "I have to put together a very precise report, and it has to be immediately understood by a lawyer." Here Data Desk's visualization capabilities are important. When it comes to accounting irregularities, its "pictures" are worth "a whole lot of words."
Name: Jack Seward
Expertise: Forensic accounting