Understanding and Applying Data Mining and Data Analysis Techniques

Abstract

The vast amounts of data generated by today’s business activities are a treasure chest of raw information waiting to be mined and analyzed. With the increase of data warehouses and legacy databases, where these floods of data reside, both data mining (DM) and data analysis (DA) have risen exponentially to become powerful audit approaches, especially in fraud prevention and detection. In this era of technology, a solid grasp of technology-enabled capabilities such as DM and DA, coupled with a greater understanding and use of quantitative techniques in all aspects of an audit, is critical. By incorporating DM and DA techniques into the audit effort, the probability of detecting fraudulent activities increases. Leveraging these techniques will enhance audit’s reputation among stakeholders and enable it to add greater value to an organization. All it takes is an interest and a willingness to learn new approaches in auditing. With the internet and computer assisted audit tools becoming more powerful, auditors should be limited only by their imaginations.