1. Data mining as a tool in fraud investigation 29 June 2015

2. Reputation promise/mission The Auditor-General of South Africa has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.

3. Outline Project timeline Development of analytical model Guide status Comments

4. 31 October 2013 Chapter Layout 31 January 2014 Design and specifications document 31 March 2014 Development of analytic model 31 March 2015 Fraud risk assessment Brazil 2016 Finalisation and approval Project timeline

5. Development of analytical model Country assignments: To design and submit a fraud scoring model for their SAI using and considering their audit methodology. Is the outcome to determine an overall risk rating of the auditee to address ISA240 requirements on planning (high/medium/low risk determination)? Are you identifying riskier areas within the auditee to focus on? What to achieve? What factors to use when determining an outcome: Use of analytical and/or non-analytical factors? Decision model Will you apply weighted scoring? What basis for the weights? How to aggregate the score to fit your outcome? How will scoring work if applied to decision model? Rating of the likelihood of fraud? Response process to determined risk Outcome

6. Guide status Purpose of the guide Definition of fraud Building of the platform Fraud scoring model Fraud detection Completed In progress Evaluate: Country assignments Building of the platform

7. Guide status: Fraud detection  Known schemes -Normal practice Fraud scheme CharacteristicsFraud indicatorAnalytical procedure  Unknown schemes -ISA 240 -Audit risk analysis

8. Guide status: Fraud scoring model  Country assignments -Two (2) members responded  Methodology -What brings everything together? -Elements to form a picture; instructions to draw the picture -SAI SA : practical implementation

9. Guide status: Fraud methodology Fraud scheme 1 CharacteristicsFraud indicator Analytical procedure Fraud scheme 2 CharacteristicsFraud indicator Analytical procedure Proactive analytics ISA240Fraud indicator Analytical procedure

10. Guide status: Building the platform  Software independent guide  Methodology and fraud scoring model -Decision tree -Flowcharting

11. Comments Tobie Bruyns (CISA) email: tobieb@agsa.co.za telephone:+27 12 422 9831 SAI – South Africatobieb@agsa.co.za