A Tool to Improve Audits

              Comparing What Execs Say to What They Report

CFO magazine reported on the efforts of an associate professor at Virginia Tech and others to develop a tool to help steer auditors to look for potential fraudulent activity. In essence, this tools compares what executives say publicly and where auditors ought to look for potential fraud.

In a test using a blind pool of business data/results, the database tool identified within a 60-80% accuracy those firms that had committed fraud.

A longer story about this technology can be found on this Virginia Tech website.

Directionally, this is the sort of technology that the audit industry sorely needs and rarely funds. My hat's off to Greg Jenkins and Patrick Fan for devising this.