Vol. 4 No. 2 (2024): Journal of AI-Assisted Scientific Discovery
Articles

The Role of Advanced Data Analytics in Enhancing Internal Controls and Reducing Fraud Risk

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  • Piyushkumar Patel
Piyushkumar Patel
Accounting Consultant at Steelbro International Co., Inc, USA
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Published 31-07-2024

Keywords

  • Advanced data analytics,
  • internal controls
Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

How to Cite

[1]
Piyushkumar Patel, “The Role of Advanced Data Analytics in Enhancing Internal Controls and Reducing Fraud Risk ”, Journal of AI-Assisted Scientific Discovery, vol. 4, no. 2, pp. 257–277, Jul. 2024, Accessed: Dec. 29, 2024. [Online]. Available: https://scienceacadpress.com/index.php/jaasd/article/view/263

Abstract

Companies need to strengthen internal controls and reduce the risk of fraud. Advanced data analytics is emerging as a crucial tool in this endeavour, allowing organizations to detect anomalies, prevent fraud, and make more informed decisions. By utilizing data-driven insights, businesses can better understand their operations, enabling them to identify areas of vulnerability that may otherwise go unnoticed. Predictive analytics, for instance, can forecast potential risks before they materialize, allowing companies to take preventative measures. Real-time monitoring is another powerful tool, offering a dynamic approach to tracking activities & transactions as they occur, ensuring that discrepancies are caught immediately. Furthermore, anomaly detection systems help identify outliers and unusual patterns that could signal fraudulent activity or weak internal controls. Integrating these analytics tools into internal audit processes helps organizations pinpoint potential issues and continuously improve their systems and strategies. However, the adoption of these advanced technologies has its challenges. Organizations may face resistance due to a lack of understanding or familiarity with data analytics, the need for skilled personnel, and the investment in technology infrastructure. Despite these obstacles, the long-term benefits of enhanced fraud detection and prevention are substantial. By leveraging advanced data analytics, businesses can protect their assets & foster a culture of transparency and accountability. Organizations must invest in training, promote a data-driven mindset, and ensure the proper integration of analytics tools within their control frameworks to achieve these outcomes. The future of internal controls is undoubtedly data-driven, and organizations that embrace these technologies will be better equipped to manage risk and ensure compliance in an increasingly complex business landscape.

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