Software

Data analysis software is an essential part of today's audit environment. Auditors rely on products such as ACL, IDEA, and SAS etc. to ensure the integrity of the data, perform continuous monitoring and to detect fraudulent transactions. However in today's troubled world, data analysis tools by themselves are not sufficient. We must also incorporate data mining into our audit world.

What is data mining and how does it differ from data analysis tools. First let us define Data Mining as it applies to auditors. Data Mining is the process of discovering meaningful new correlations, patterns and trends by examining large amounts of data, using pattern recognition technologies as well as statistical and mathematical techniques.

The limitations of data analysis tools are that they require that programs be set up to run against the data. These programs are written by auditors based upon their previous experience auditing that specific environment in cooperation with the business analyst, whose knowledge of the line of business is the basis for the analysis routines.

This is where we have shortchanged the audit process. Humans think like humans and therefore there is an inherent prejudice in the routines that are executed. For example, an auditor would not think twice about running an ACL Classification routine on employee level in a Human Resource Payroll application and monitoring the employee compensation amounts. But would that auditor test the relationship between the employee compensation and the employee's previous employment history?

That is why we must not rely entirely on the human thought process but also incorporate data mining into the audit process.

WizRule - business rules detector

WizRule is a PC data-auditing tool based on data mining technology. WizRule performs complex analysis of your data, revealing inconsistencies, errors and cases that require further investigation. WizRule reveals all the if-then rules, mathematical formula rules, and spelling irregularities. The software reads the database once and then automatically separates cases deviating from the rules into data entry errors and suspicious errors. WizRule calculates the degree of deviation from the norm for each field in each record in the database with respect to the discovered rules.

WizRule can be used in Auditing, fraud detection, data scrubbing and due diligence reviews. The ideal scenario is to use WizRule after running your data through Auditing analysis software such as ACL or IDEA. These programs are usually used in a structured fashion. That is, the auditor has devised a testing plan to apply against the data, such as stratification, classification, testing for duplicates, etc. However, the auditor may miss relationships that exist within the data because they do not appear to be meaningful or logical. An example that comes to mind is an audit of a dental claims system where WizRule uncovered anomalies within the zip code field. WizRule revealed that the exceptions to the rule were that patients lived nearby the dentist's office. The rule was that patient's lived far away from the dentist. Further investigation revealed that the dentist was using a phony mailing address, so that he could avail himself of a higher rate schedule based upon the location of the dental provider's address. A demo version of WizRule can be downloaded from WizSoft's website: www.wizsoft.com. Originally released in 1994, the current version of WizRule is Version 4.01.

The learning curve to get WizRule up and running is very small. Any user with familiarity with Microsoft Access or Microsoft Excel should have little trouble mastering this product. The opportunity for immediate payback is there because WizRule is relatively inexpensive. The cost per license is only $1,395. The yearly maintenance fee, which includes updates and technical support is only $279.

WizWhy - analyzer and predictor

WizWhy is a data-mining software tool that automatically reveals all the if-then rules in the data and on the basis of these rules summarizes the data, points out interesting phenomena in the data, reveals the main patterns, points out cases deviating from the rules, and issues predictions for new cases.

WizWhy determines how the values of one field in the data are affected by the values of others fields. WizWhy performs its analysis based on the one field selected by the user - the field to predict or the dependent variable. The software reads the database once and then automatically lists the rules that relate between the dependent variable and the other fields. The rules are formulated as if-then and if-and-only-if sentences. On the basis of the discovered rules WizWhy points out unexpected cases in the data (cases that deviate from the rules). How does this work? WizWhy issues predictions regarding the records of the data set under analysis and points out cases where the dependent variable's value deviates from the value anticipated according to the rules. Such a deviation may indicate a data entry error, a fraud or another type of error - a case to be investigated. WizWhy lists these cases, displaying the expected value together with the relevant rules. The user can review the cases in order to audit the data.

The cost per license is only $3,995. The yearly maintenance fee, which includes updates and technical support, is only $799.