This document discusses how forensic accountants can help mitigate fraudulent insurance claims by utilizing technology and collaborating with other experts. It emphasizes that forensic accountants must understand both the technical causes of losses as well as how to quantify financial impacts. By working with experts in other fields like computer forensics, and maintaining neutrality, forensic accountants can provide insurers with unbiased analyses that strengthen investigations of suspicious claims and help reduce costs. The role of forensic accountants is evolving as claims become more complex and technology advances.
Vers une place renouvelée du citadin dans les démarches d’expérimentation urb...Matthieu Boury
Article rédigé par Matthieu Boury, consultant en innovation urbaine au sein de l'agence Nova7, dans le cadre d'un recueil de contributions publié en mars 2014 par Grand Lyon Prospective : La future métropole vue par 50 contributeurs.
Pour accéder au recueil complet : http://www.millenaire3.com/publications/la-future-metropole-vue-par-50-contributeurs
Vers une place renouvelée du citadin dans les démarches d’expérimentation urb...Matthieu Boury
Article rédigé par Matthieu Boury, consultant en innovation urbaine au sein de l'agence Nova7, dans le cadre d'un recueil de contributions publié en mars 2014 par Grand Lyon Prospective : La future métropole vue par 50 contributeurs.
Pour accéder au recueil complet : http://www.millenaire3.com/publications/la-future-metropole-vue-par-50-contributeurs
Tennessee HFMA Conference | Turning Chaos Into OpportunityMichael Burcham
Presentation given on 05.20.14 at the Tennessee HFMA Spring Conference. Speaking about new opportunities in Healthcare related to the Affordable Care Act, Consumerism in Healthcare, New Investment Opportunities, and how large Health Systems can become more competitive in the market.
Using Advanced Analytics to Combat P&C Claims FraudCognizant
P&C insurers need to embrace predictive and advanced analytics -- as well as analytics as a service -- to combat the growing complexity and sophistication of claims fraud.
Harnessing The Power Of (Claim Risk) Analytics Published Captive Review Sept 09paulmarshall
Risk analytics is revolutionizing the processes and tools employed by insurers to more quickly and accurately market, price and underwrite their products. Ad¬ditionally, these tools have the potential to enhance an insurer’s ability to manage claims more effectively. With improved management, insurers can lower overall costs, reduce premiums, reduce claims, gain competitive advantage and, ultimately, increase their market share. Through advances in technol¬ogy and data availability, many insurers are already benefiting from the use of data analytics and predictive modeling capabilities to better understand and identify risk.
Student Name Brief #5 Use of Audit Software Review and Survey.docxemelyvalg9
Student Name Brief #5 Use of Audit Software: Review and Survey Date
Central Message: Auditing has had to change from “around the computer” to “through the
computer” due to sources only being available in electronic form. CAATs and CAATTs improve
efficiency and effectiveness of audits. A variety of standards and statements were issued because
new guidance was necessary once the growth of IT affected the nature, timing, and extent of audit
procedures. Continuous auditing is the key to improving the efficiency and effectiveness of audits.
Author’s Theme: Auditors are advised to use CAATs to gather evidence so that they can increase
the efficiency of inspection and analytical review. One of the many statements released on IT, SAS
94, stressed that IT’s impact on internal control is a result of the nature and extent of the system’s
complexity rather than the size of the firm, which is why auditing through the computer is
important when testing controls. Auditors can pinpoint the risk areas and thus have a better idea of
what to inquire when questioning management; improving the quality of the evidence and thus the
audit. Importance: Advancement in information technology has a direct impact on business
processes and the audit. Increasingly, auditors are required to perform audits in computerized
environments; therefore, additional standards are required to ensure that financial statements
auditors continue to perform high quality audits. Conclusion/Opinions: (1) The author concludes
that auditing through the computer is important when testing controls because of the impact IT has
on internal control. GAAS field work #2 supports this because the IT system is a part of the entity’s
environment, and especially, when it is complex, the auditor must audit through the computer to
adequately assess internal control risk. (2) Using CAATs can increase the efficiency of audit
procedures. SAS No. 106 indicates that CAATs allow auditors to inspect electronic evidence directly.
(3) Auditors should use data analysis from audit software in order to pinpoint the risk areas and
gain a better idea of what to ask management. AS # 5 states that risk assessment underlies the
entire audit process, including the determination of significant accounts and relevant assertions,
selecting controls to test, and determining the evidence necessary.
Auditing
Article-Briefs
All Briefs are Individual Assignments
Briefs are one (1) page write-ups of selected articles requiring you to (1) summarize the article with the central message and the author’s theme; (2) discuss 2 reasons why this is an important or unimportant topic for the audit profession; and (3) indicate your agreement or disagreement with 3 of the author’s conclusions or opinions and support your 3 points with different auditing standards (PCAOB, ASB, IAASB, ACFE, IIA etc.). Do not agree or disagree with the standards but agree or disagree with the author. You may NO.
, eDiscovery: Why Humans Are Better Than Algorithms; ACC Docket May 2010Susan Burns
Article I co-authored on effective use of document review team to control sky-rocketing costs of discovery in litigation. Published in May 2010 issue of ACC "Docket."
Tennessee HFMA Conference | Turning Chaos Into OpportunityMichael Burcham
Presentation given on 05.20.14 at the Tennessee HFMA Spring Conference. Speaking about new opportunities in Healthcare related to the Affordable Care Act, Consumerism in Healthcare, New Investment Opportunities, and how large Health Systems can become more competitive in the market.
Using Advanced Analytics to Combat P&C Claims FraudCognizant
P&C insurers need to embrace predictive and advanced analytics -- as well as analytics as a service -- to combat the growing complexity and sophistication of claims fraud.
Harnessing The Power Of (Claim Risk) Analytics Published Captive Review Sept 09paulmarshall
Risk analytics is revolutionizing the processes and tools employed by insurers to more quickly and accurately market, price and underwrite their products. Ad¬ditionally, these tools have the potential to enhance an insurer’s ability to manage claims more effectively. With improved management, insurers can lower overall costs, reduce premiums, reduce claims, gain competitive advantage and, ultimately, increase their market share. Through advances in technol¬ogy and data availability, many insurers are already benefiting from the use of data analytics and predictive modeling capabilities to better understand and identify risk.
Student Name Brief #5 Use of Audit Software Review and Survey.docxemelyvalg9
Student Name Brief #5 Use of Audit Software: Review and Survey Date
Central Message: Auditing has had to change from “around the computer” to “through the
computer” due to sources only being available in electronic form. CAATs and CAATTs improve
efficiency and effectiveness of audits. A variety of standards and statements were issued because
new guidance was necessary once the growth of IT affected the nature, timing, and extent of audit
procedures. Continuous auditing is the key to improving the efficiency and effectiveness of audits.
Author’s Theme: Auditors are advised to use CAATs to gather evidence so that they can increase
the efficiency of inspection and analytical review. One of the many statements released on IT, SAS
94, stressed that IT’s impact on internal control is a result of the nature and extent of the system’s
complexity rather than the size of the firm, which is why auditing through the computer is
important when testing controls. Auditors can pinpoint the risk areas and thus have a better idea of
what to inquire when questioning management; improving the quality of the evidence and thus the
audit. Importance: Advancement in information technology has a direct impact on business
processes and the audit. Increasingly, auditors are required to perform audits in computerized
environments; therefore, additional standards are required to ensure that financial statements
auditors continue to perform high quality audits. Conclusion/Opinions: (1) The author concludes
that auditing through the computer is important when testing controls because of the impact IT has
on internal control. GAAS field work #2 supports this because the IT system is a part of the entity’s
environment, and especially, when it is complex, the auditor must audit through the computer to
adequately assess internal control risk. (2) Using CAATs can increase the efficiency of audit
procedures. SAS No. 106 indicates that CAATs allow auditors to inspect electronic evidence directly.
(3) Auditors should use data analysis from audit software in order to pinpoint the risk areas and
gain a better idea of what to ask management. AS # 5 states that risk assessment underlies the
entire audit process, including the determination of significant accounts and relevant assertions,
selecting controls to test, and determining the evidence necessary.
Auditing
Article-Briefs
All Briefs are Individual Assignments
Briefs are one (1) page write-ups of selected articles requiring you to (1) summarize the article with the central message and the author’s theme; (2) discuss 2 reasons why this is an important or unimportant topic for the audit profession; and (3) indicate your agreement or disagreement with 3 of the author’s conclusions or opinions and support your 3 points with different auditing standards (PCAOB, ASB, IAASB, ACFE, IIA etc.). Do not agree or disagree with the standards but agree or disagree with the author. You may NO.
, eDiscovery: Why Humans Are Better Than Algorithms; ACC Docket May 2010Susan Burns
Article I co-authored on effective use of document review team to control sky-rocketing costs of discovery in litigation. Published in May 2010 issue of ACC "Docket."
With information technology playing an increasingly substantive role in the running of captive entities, its application in law, claims management and e-billing are explored.
Here are the slides used in my presentation to the Toronto Computer Lawyers Group earlier today, The Year in Review: Developments in Computer, Internet and E-Commerce Law (2010-2011). It covers significant developements since my talk last spring.
1. 15 MITIGATING FRAUDULENT CLAIMS 113
Forensic accounting
Turning Risk into Opportunity
In recent years, we have witnessed The Opportunity of Technology of the flood. With the assistance of
exponential growth and advance- our computer forensics’ expert, we
ment in technology that is shaping Technology is growing at a signifi- were able to preserve and recover
every aspect of our personal and cor- cant rate and impacts every aspect the electronic accounting records
porate lives. Such changes bring ad- of our day-to-day lives. The ‘vir- required to quantify the claim. The
ditional complexities to claims and tual’ environment that we live in benefits of using a computer foren-
therefore new challenges for insur- has enabled us to instantly access sics’ expert to assist the forensic ac-
ers when adjusting claims — includ- information and communicate with countant, included:
ing the risk of misrepresented and each other seamlessly and cost ef- (1) Mitigation of the insured’s loss as
fraudulent claims. While the global fectively. Social networking sites, a result of being able to get the busi-
economic challenges experienced in such as Facebook and Twitter have ness back up and running sooner;
late 2008 and early 2009 have exacer- created online forums, changing the (2) Obtaining electronic account-
bated such risks, we believe they cre- way we connect and communicate. ing records in a manner that deems
ate opportunities — both for insurers A forensic accountant practicing in them admissible in court, if re-
and the experts they retain. the current technological environ- quired; and,
To take advantage of these oppor- ment recognizes that an estimated (3) More efficient (and therefore less
tunities, experts have to be prepared 90 per cent of data today is created costly) quantification of the claim
to adapt to the changing environ- electronically and much of that never by accessing the accounting records
ment. For forensic accountants, this makes it to paper. It would therefore electronically.
means: follow that the use of technology and While insurers take steps to inves-
• Understanding and utilizing the working in conjunction with experts tigate and mitigate fraudulent claims,
latest technology to quantify such as computer forensic examiners fraud is a reality in the insurance
claims; can be critical in quantifying and in- industry; it’s estimated to be worth
• Understanding the increasingly vestigating certain claims. over $1.3 billion annually. Forensic
complex technical aspects of a Consider the business interrup- accountants, who have the requi-
claim in order to properly quan- tion claim submitted by a restaurant site knowledge, skills and access to
tify a loss; and, whereby the hard copy financial electronic tools and experts, when
• Recognizing an expert’s obligation records and computer (also con- required, can assist insurers’ investi-
under the revised Rules of Civil taining financial records) were kept gation of suspicious claims, in order
Procedure. in the basement, i.e. the location to further mitigate the cost of claims.
CIAA/ACEI CLAIMS MANU A L 2 0 1 0
2. 114
Forensic accounting MITIGATING FRAUDULENT CLAIMS
Mitigating the Risk of and how to acquire that information. it be required.
Expert Isolation While experts can share reports, In Europe, the courts normally
the early involvement of the foren- retain experts and determine their
Forensic engineers, computer foren- sic accountant, coupled with the mandate; by contrast, in Canada, ex-
sic professionals and other experts ability to collaborate with other ex- perts are retained by one or more of
are often retained separately by an perts, may provide an opportunity to the involved parties. This opens the
insurer to investigate the cause and further mitigate a claim. A team ap- possibility for the forensic accoun-
origin of trigger event(s) leading to proach involving experts who under- tant to be influenced to assume the
a claim, including (but not necessar- stand both cause and origin (foren- role of an advocate on behalf of their
ily limited to): A motor vehicle acci- sic engineers) and financial impact client. However, assuming an advo-
dent, structural/mechanical failure, (forensic accountants) will serve to cate role, even in perception, can
fire or product failure. But ‘cause’ is achieve this objective. have serious consequences in court.
only half of the story, and invariably, Regardless of the approach, when The courts have clearly defined
the forensic accountant is retained to a forensic accountant has an under- the role of experts and expectation of
quantify the financial impact or loss standing of the loss, it will ultimately independence, such as in the case of
associated with such an event — of- result in greater value being deliv- Eastern Power Ltd. V. Ontario Elec-
ten in isolation of the other experts. ered to the claims process. tricity Financial Corp. 2008 Carswell
Forensic accountants cannot Ont 5635 S.C.J., wherein Bellamy J.
fully appreciate all the technical as- The Need for Expert Neutrality states in paragraph 292:
pects of a loss. However without this “The purpose of expert evidence
knowledge, loss quantification may In addition to understanding the loss, is to assist the trier of fact to under-
be erroneous — therefore, claim forensic accountants are retained by stand evidence outside of his or her
mitigation may not be maximized. insurers as a result of their unbiased, range of experience so that a correct
In order to provide the insurer with objective approach to quantifying conclusion can be reached….R.V.D.
maximum value, forensic accoun- and investigating claims — and their (D), [2002] 2 S.C.C. It is commonly
tants must understand both what ability to provide impartial expert recognized that in order to be of as-
they don’t know (and need to know), testimony before the courts, should sistance to the trier of fact, experts
C I A A / A C E I C L A I M S M A N UAL 2010
3. 15 MITIGATING FRAUDULENT CLAIMS 115
Forensic accounting
must remain objective.” knowledgement of Expert’s Duty” will continue to evolve, as technol-
Courts have also been known to that requires experts to sign a writ- ogy advances and claims become
disqualify experts for their lack of ten acknowledgement of their duty more complex. The critical issues
neutrality. In Alfano v. Piersanti, “…to provide opinion evidence that such as better communication be-
2009 CanLII 12799 (Ont. Sup Ct.), is fair, objective and non-partisan”. tween experts, impartial evidence
the court disqualified the forensic The topic of objectivity must al- and use of technology in quantify-
accounting expert, primarily as a ways be considered, as an insurer ing and investigating claims will un-
result of emails exchanged between cannot afford to find themselves in doubtedly shape the industry — and
the expert and the retaining party court with a disqualified expert re- separate the great experts from the
that revealed the experts’ role as an port, or an expert who has lessened good ones.
independent expert was very much their credibility in the eyes of the
secondary to the role of “someone court. This will invariably extend Michael Sigsworth is a senior foren-
who is trying their best for their cli- the claims process — and increase sic accountant with Giffin Koerth Inc.
ent to counter the other side.”1 costs to the insurer.
The importance of an expert’s 1. Personal Injury Law and Practice,
objectivity and independence is evi- Raising the bar and expectations Osgoode Hall Law School Professional
denced by the amendments to the of forensic accountants: Looking Development CLE, The Most Signifi-
Ontario Rules of Civil Procedure into the Future cant Recent Judicial Decisions Affect-
that came into effect on Jan. 1, 2010. ing Personal Injury Litigation, Septem-
Specifically, the new rules include The demands placed on forensic ac- ber 21, 2009.
the implementation of Form 53, “Ac- countants in the insurance industry
CIAA/ACEI CLAIMS MANU A L 2 0 1 0